1

NOTICENOTICENOTICENOTICENOTICE

8282828282ndndndndnd ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING

NOTICENOTICENOTICENOTICENOTICE IS HEREBY GIVEN THAT THE EIGHTY SECOND ANNUAL GENERAL MEETINGEIGHTY SECOND ANNUAL GENERAL MEETINGEIGHTY SECOND ANNUAL GENERAL MEETINGEIGHTY SECOND ANNUAL GENERAL MEETINGEIGHTY SECOND ANNUAL GENERAL MEETING OF THE MEMBERS OFRAYMOND LIMITED WILL BE HELD ON MONDAY, JUNE 18, 2007 MONDAY, JUNE 18, 2007 MONDAY, JUNE 18, 2007 MONDAY, JUNE 18, 2007 MONDAY, JUNE 18, 2007 AT 11.00 A.M11.00 A.M11.00 A.M11.00 A.M11.00 A.M. AT THE REGISTERED OFFICE OFTHE COMPANY AT PLOT NO. 156/H. NO.2, VILLAGE ZADGAON, RATNAGIRI 415 612 (MAHARASHTRA) TOTRANSACT THE FOLLOWING BUSINESS :

ORDINARY BUSINESS :ORDINARY BUSINESS :ORDINARY BUSINESS :ORDINARY BUSINESS :ORDINARY BUSINESS :

1. To receive, consider and adopt the Audited Statement of Accounts together with Directors’ Report as also the Auditors’ Reportthereon for the year ended March 31, 2007.

2. To declare dividend on Equity Shares.

3. To appoint a Director in place of Shri Nana Chudasama, who retires by rotation and, being eligible, offers himself forreappointment.

4. To appoint a Director in place of Shri B.K. Kedia, who retires by rotation and, being eligible, offers himself for reappointment.

5. To pass with or without modifications, the following Resolution as an Ordinary Resolution but in the event of the provisions ofSection 224A of the Companies Act, 1956 becoming applicable to the Company on the date of holding of this meeting, thesame will be proposed as a Special Resolution :

“RESOLVED THAT Messrs. Dalal & Shah, Chartered Accountants, be and are hereby reappointed Auditors of the Companyto hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting on a remunerationof Rs. 27.50 lakhs plus service tax as applicable and reimbursement of actual travel and other out-of-pocket expenses.”

SPECIAL BUSINESS :SPECIAL BUSINESS :SPECIAL BUSINESS :SPECIAL BUSINESS :SPECIAL BUSINESS :

To pass with or without modifications, the following resolutions :

As an Ordinary Resolution:As an Ordinary Resolution:As an Ordinary Resolution:As an Ordinary Resolution:As an Ordinary Resolution:

6. “RESOLVED THAT Shri I. D. Agarwal, who was appointed as an Additional Director pursuant to Section 260 of theCompanies Act, 1956 and Article 161 of the Articles of Association of the Company, be and is hereby appointed as a Directorof the Company, liable to retire by rotation.”

As a Special Resolution:As a Special Resolution:As a Special Resolution:As a Special Resolution:As a Special Resolution:

7. “RESOLVED THAT pursuant to the provisions of Sections 198, 309 (4) and all other applicable provisions, if any, of theCompanies Act, 1956 or any statutory modification(s) or re-enactment thereof, the consent of the Company be and is herebyaccorded to the payment of commission of a sum not exceeding 1% of the annual net profit of the Company computed inaccordance with the provisions of Sections 198, 349 and 350 of the said Act, subject to an overall ceiling of Rs. 25 lakhs(Rupees Twenty Five lakhs only) to such Directors of the Company (other than the Chairman and Managing Director andWholetime Director) in such proportion and manner as may be directed by the Board of Directors, for a period of two (2) yearsand such payment shall be made in respect of the profits of the Company for the financial years commencing April 1, 2006 toMarch 31, 2007 and April 1, 2007 to March 31, 2008.”

By Order of the BoardFor Raymond LimitedRaymond LimitedRaymond LimitedRaymond LimitedRaymond Limited

Registered Office : R. NarayananR. NarayananR. NarayananR. NarayananR. NarayananPlot No. 156/H. No.2 Director – LegalDirector – LegalDirector – LegalDirector – LegalDirector – LegalVillage Zadgaon & Company Secretary& Company Secretary& Company Secretary& Company Secretary& Company SecretaryRatnagiri 415 612 (Maharashtra)Dated : April 27, 2007

2

Notes :Notes :Notes :Notes :Notes :

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. Proxies, in order to effective, must be received at the Registered Office of the Company not less than 48 hours before thecommencement of the Meeting.

3. The Explanatory Statement setting out the material facts concerning Special Business in respect of Item Nos. 6 & 7 of theaccompanying Notice as required by Section 173 of the Companies Act, 1956, is annexed hereto.

4. The Register of Members and Share Transfer Books of the Company will remain closed from June 1, 2007 to June 18, 2007(both days inclusive) in connection with the Annual General Meeting.

5. The dividend as recommended by the Board, if declared at the meeting, will be paid on or after June 19, 2007 to those memberswhose names appear on the Company’s Register of Members on June 18, 2007. In respect of the shares in electronic form, thedividend will be payable on the basis of beneficial ownership as per details furnished by National Securities Depository Limitedand Central Depository Services (India) Limited for this purpose.

6. Members are requested to notify immediately any change in their address/bank mandate to their respective Depository Participants(DPs) in respect of their electronic share accounts and to the Registrar and Share Transfer Agent of the Company at IntimeSpectrum Registry Limited, C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai – 400 078, Maharashtrain respect of their physical share folios, if any.

7. Dividend for the Financial Year ended March 31, 2000, which remains unpaid or unclaimed, will be due for transfer to theInvestor Education and Protection Fund of the Central Government later this year, pursuant to the provisions of Section 205Cof the Companies Act, 1956.

Members, who have not yet encashed their dividend warrants for the Financial Year ended March 31, 2000 or any subsequentfinancial years are requested to lodge their claims with the Company/Intime Spectrum Registry Limited, without delay. Membersare advised that no claims shall lie against the said Fund or the Company for the amounts of dividend so transferred to the saidFund.

8. Members holding shares in electronic form may please note that their bank details as furnished by the respective Depositories tothe Intime Spectrum Registry Limited will be printed on their dividend warrants as per the applicable regulations of theDepositories and the Company/Intime Spectrum Registry Limited will not entertain any direct request from such members fordeletion of/change in such bank details. Further, instructions if any, already given by them in respect of shares held in physicalform will not be automatically applicable to the dividend paid on shares in electronic form. Members may, therefore, giveinstructions regarding bank accounts in which they wish to receive dividend, directly to their Depository Participants.

9. Reappointment of Directors :

At the ensuing Annual General Meeting, Shri Nana Chudasama and Shri B.K. Kedia, retire by rotation and being eligible, offerthemselves for reappointment. Pursuant to Clause 49 (VI) (A) of the Listing Agreement relating to the Code of CorporateGovernance, the particulars of the aforesaid Directors are given below :

Profile of Directors retiring by rotation :Profile of Directors retiring by rotation :Profile of Directors retiring by rotation :Profile of Directors retiring by rotation :Profile of Directors retiring by rotation :

a. Shri Nana Chudasama, aged 75 years joined the Board of Directors of the Company on 1st August, 1986. Shri Chudasamais a well known personality in the field of business and social activities. Shri Chudasama is member of Shareholders’Committee and Remuneration Committee of the Company.

The names of Companies in which Shri Chudasama holds other Directorships are as follows :

Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Board Position heldBoard Position heldBoard Position heldBoard Position heldBoard Position held

SAN Engineering & Locomotive Company Limited – DirectorNew Consolidated Construction Company Limited – DirectorThe Dukes Retreat Limited – DirectorMid-Day Multimedia Limited – Director

3

Shri Nana Chudasama is not a member of any Committee of the Board in any of the above mentioned companies.

He holds 663 equity shares in the Share Capital of the Company.

b. Shri B. K. Kedia, aged 79 years and a post graduate in Arts, has participated in the Advance Management Programme(AMP) in Harvard. Shri Kedia was awarded a Certificate of Honour by the Indian Woollen Mills’ Federation (IWMF) forhis distinguished services to the Indian Woollen Industry. Shri Kedia is the Managing Committee Member of IndianWoollen Mills’ Federation, Mumbai and Chairman Emeritus of Wool Research Association.

During his association with the Company for over five decades, Shri B. K. Kedia held various onerous Management andBoard positions including that of Wholetime Director and Executive Director. On January 1, 1995 he was appointed asSenior President & Wholetime Director, and later on elevated to the position of Senior President and Joint ManagingDirector. Since August 1, 2000 Shri Kedia is a Non-Executive Director of the Company. Shri Kedia is the Chairman of theAudit Committee and Member of Remuneration Committee of the Company.

The names of Companies in which Shri B.K.Kedia holds other Directorships are as follows :

Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Board Position heldBoard Position heldBoard Position heldBoard Position heldBoard Position held

J.K. Investors (Bombay) Limited – DirectorRaymond Apparel Limited – DirectorPashmina Holdings Limited – DirectorJ.K. Helene Curtis Limited – DirectorHindustan Files Limited – DirectorEverblue Apparel Limited – DirectorSilver Spark Apparel Limited – DirectorJ.K. Ansell Limited – DirectorRadha Krshna Films Limited – DirectorJ.K. (England) Limited – Director

Shri B.K. Kedia is not a member of any Committee of the Board in any of the above mentioned companies. He holds 100equity shares in the Share Capital of the Company.

10.10.10.10.10. Profile of Shri I.D. Agarwal – Additional Director proposed to be appointed as a Director:Profile of Shri I.D. Agarwal – Additional Director proposed to be appointed as a Director:Profile of Shri I.D. Agarwal – Additional Director proposed to be appointed as a Director:Profile of Shri I.D. Agarwal – Additional Director proposed to be appointed as a Director:Profile of Shri I.D. Agarwal – Additional Director proposed to be appointed as a Director:

Shri I.D. Agarwal, aged 66 years who has been appointed as an Independent Director w.e.f. June 23, 2006, was earlier aNominee Director of Unit Trust of India on the Board of the Company during October, 2001 to February, 2006.

Shri Agarwal, M.Com. D.S.M., C.A.I.I.B., has 37 years of experience in Banking, Finance & Currency, has undergoneprofessional training with Bank of England (U.K.), Midland Bank (U.K.), Bundesbank (Germany), and Dresdnerbank(Germany). Shri Agarwal, former Executive Director, Reserve Bank of India, was an Advisor to the United Nations andhas been the Director of Small Industries Development Bank of India (SIDBI). His other directorship is as under:

Name of the CompanyName of the CompanyName of the CompanyName of the CompanyName of the Company Board Position heldBoard Position heldBoard Position heldBoard Position heldBoard Position held Committee MembershipsCommittee MembershipsCommittee MembershipsCommittee MembershipsCommittee Memberships

Western India Shipyard Limited, Goa Director Member - Audit Committee

Shri I.D. Agarwal holds no equity shares in the Share Capital of the Company.

ANNEXURE TO THE NOTICEANNEXURE TO THE NOTICEANNEXURE TO THE NOTICEANNEXURE TO THE NOTICEANNEXURE TO THE NOTICE

Explanatory Statement as required by Section 173 of the Companies Act, 1956 (‘the Act’).Explanatory Statement as required by Section 173 of the Companies Act, 1956 (‘the Act’).Explanatory Statement as required by Section 173 of the Companies Act, 1956 (‘the Act’).Explanatory Statement as required by Section 173 of the Companies Act, 1956 (‘the Act’).Explanatory Statement as required by Section 173 of the Companies Act, 1956 (‘the Act’).

The following Explanatory Statement relating to Special Business at Item Nos. 6 & 7 of the accompanying Notice sets out allmaterial facts as required under Section 173 of the Act.

Item No. 6Item No. 6Item No. 6Item No. 6Item No. 6

At the meeting of the Board of Directors of the Company held on June 23, 2006, Shri I.D. Agarwal was appointed AdditionalDirector of the Company and holds office of Director upto the date of the ensuing Annual General Meeting in terms of Section 260of the Act.

4

Pursuant to Section 257 of the Act, the Company has received a notice, together with requisite deposit, from a member signifying hisintention to propose Shri I.D. Agarwal as a candidate for the office of Director of the Company.

The Directors commend the resolution for approval of the members.

Except for Shri I.D. Agarwal, no Director of the Company is concerned or interested in the said Resolution.

Item No. 7Item No. 7Item No. 7Item No. 7Item No. 7

At the Annual General Meeting of the Company held on June 23, 2006, the shareholders had accorded their consent to the Board ofDirectors of the Company to pay commission not exceeding 1% of the Annual Net Profit of the Company subject to an overallceiling of Rs.25 lakhs to be paid and distributed amongst Non Wholetime Directors of the Company for the financial year 2005-06.

It is now proposed that the Non Wholetime Directors be paid the same level of commission not exceeding 1% of the Annual NetProfit of the Company subject to overall ceiling of Rs.25 lakhs for further period of two financial years viz. 2006-07 and 2007-08.

The Board commends the Special Resolution set out at Item No.7 of the accompanying Notice.

Shri Gautam Hari Singhania being relative of Dr. Vijaypat Singhania and Shri Anant Singhania, and all the Non-WholetimeDirectors of the Company, may be deemed to be concerned or interested in the aforesaid resolution to the extent of the commissionthat may be received by them.

By Order of the BoardFor Raymond LimitedRaymond LimitedRaymond LimitedRaymond LimitedRaymond Limited

Registered Office : R. NarayananR. NarayananR. NarayananR. NarayananR. NarayananPlot No. 156/H. No.2 Director – LegalDirector – LegalDirector – LegalDirector – LegalDirector – LegalVillage Zadgaon & Company Secretary& Company Secretary& Company Secretary& Company Secretary& Company SecretaryRatnagiri 415 612 (Maharashtra)Dated : April 27, 2007

CONTENTSPages

Directors’ Report 2-7

Management Discussionand Analysis 8-11

Corporate Governance Report 12-19

Shareholder Information 20-23

Ten-Year Highlights 24

Auditors’ Report 25-27

Balance Sheet 28

Profit and Loss Account 29

Cash Flow Statement 30

Schedules ‘1’ to ‘15’ 31-44

Schedule ‘16’ – Notes Forming 45-57

Part of the Accounts

Annexure I - Statement of Significant 58-59Accounting Policies and Practices

Research and Development 59Expenditure Account

Consolidated Accounts 60-76

Details of Balance Sheet and

Income and Expenditure of

Subsidiary Companies 77

Balance Sheet Abstract andCompany’s General Business Profile 78

BOARD OF DIRECTORSDR. VIJAYPAT SINGHANIA, Chairman Emeritus

GAUTAM HARI SINGHANIA, Chairman & Managing Director

B. K. KEDIA

NANA CHUDASAMA

ANANT SINGHANIA

B. V. BHARGAVA

U. V. RAO

I. D. AGARWAL (w.e.f. 23-6-2006)

NABANKUR GUPTA

P. K. BHANDARI, Wholetime Director & Group President

MANAGEMENT EXECUTIVESGAUTAM HARI SINGHANIA, Chairman and Managing Director

P. K. BHANDARI, Wholetime Director and Group President

ANIRUDDHA DESHMUKH, President – FMCG & Retail

DEEPAK KHETRAPAL, President – Corporate & Strategic Initiatives

HARSHAL JAYAVANT, President – Engineering Business

MARCEL PARKER, President – HR

ROBERT LOBO, President – Shirting Fabric Business

SHREYAS JOSHI, President – Group Apparel

S.K. SINGHAL, President – Textiles

H. SUNDER, President – Finance, Chief Financial Officer

DIRECTOR – LEGAL& COMPANY SECRETARYR. NARAYANAN

BANKERSBANK OF INDIA

BANK OF MAHARASHTRA

BANK OF AMERICA

CENTRAL BANK OF INDIA

CITIBANK N.A.

HDFC BANK LIMITED

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

STATE BANK OF INDIA

STANDARD CHARTERED BANK LIMITED

AUDITORSDALAL & SHAH

Chartered Accountants

INTERNAL & OPERATIONAL AUDITORSMAHAJAN & AIBARA

Chartered Accountants

REGISTERED OFFICEPLOT NO.156, H.NO. 2, VILLAGE ZADGAON

RATNAGIRI, 415 612 (MAHARASHTRA)

REGISTRAR & SHARE TRANSFER AGENTINTIME SPECTRUM REGISTRY LIMITED

C-13, PANNALAL SILK MILLS COMPOUND, L.B.S MARG,

BHANDUP (WEST), MUMBAI – 400 078

2

REPORT OF THE DIRECTORSTOTHE MEMBERSYour Directors have pleasure in placing before you their 82nd Annual Report and Accounts for the year endedMarch 31, 2007.FINANCIAL HIGHLIGHTSDuring the year, the gross turnover, net of returns and discounts was lower by 3% at Rs.1,284.19 crores (including gross salesof the Company’s erstwhile denim division only upto July 31, 2006) compared to Rs.1,324.74 crores in the previous year.Profit before tax, prior period adjustments and exceptional items was Rs.156.98 crores as against Rs.173.65 crores in theprevious year.Net profit, after exceptional items (including surplus on divestment of the denim division – Rs.88.09 crores), prior yearadjustments, provision for taxes was higher at Rs.202.12 crores as against Rs.121.00 crores last year.These results include the results of operations of the denim division only upto July 31, 2006. The division was subsequentlycombined into a 50:50 joint venture with UCO NV of Belgium. Consequently the results of the current year are not strictlycomparable with that of the previous year.APPROPRIATIONSAn amount of Rs.40 crores (Previous Year: Rs.12.10 crores) is credited to the General Reserves. Out of the amount availablefor appropriation, your Directors recommend a dividend of 50% (50%) on Equity Shares. The dividend tax on the proposeddividend will be Rs.5.22 crores (Previous Year: Rs.4.30 crores).PERFORMANCE OF DIVISIONSTextile Division -The textile division continued to maintain its market leadership position during the year. With Phases I and II of expansionsat the Vapi plant becoming operational, the division reported increased net revenues and profits for the year underreview. Sales increased by 14% and Profit before interest and tax by 15%. The domestic fabric sales component increasedby 16% with increased network penetration and wider product range. The division’s export sales increased by 10%, withexport turnover crossing the Rs.100 crores mark to reach Rs.110 crores. Increase in export sales was achieved against stiffinternational competition. Going forward, with the buoyant demand for worsted fabrics, continued focus on exports, andincreased retail penetration through new store openings, the outlook for the current year is encouraging.Files and Tools Division -The Division continues to remain the market leader in the domestic files market and the largest producer of files globally.Overall, the performance of the division was satisfactory. Exports of the division have grown by 8%, compared to theprevious year. Drill sales was however marginally lower compared to the previous year, primarily due to stiff price competitionfrom local players in domestic market and from low priced Chinese drills in the export market. The Division is consideringvarious global consolidation opportunities and product portfolio expansions, to attain higher growth in its businesses.FINANCE AND ACCOUNTSThe observations made by the Auditors in their Report have been clarified in the relevant notes forming part of theAccounts, which are self explanatory.JOINT VENTURESRaymond UCO Denim Private Limited (RUDPL) – Consolidated operationsThe Denim business of Raymond Limited was combined with that of UCO NV, Belgium to form a 50:50 joint venture. Thejoint venture commenced operations from August 1, 2006.The over-supply situation in the global denim industry witnessed last year continues with capacities increasing in the Asianregion.The Indian operations of the joint venture comprising the fabric and garmenting operations recorded net sales (net ofreturns and discounts) of Rs.260 crores, including export sales of Rs.136 crores. The loss for the year before tax was Rs. 7.8crores after accounting for one time costs. The loss after fringe benefit tax and wealth tax was Rs. 8 crores. The fabricdivision which produces differentiated varieties of denim fabric registered over 90% capacity utilisation. The garmentingoperations, with improving efficiencies, is moving up to the medium and high end of the fashion market, in alliance with awashing and finishing consulting company of international repute.Significant additions to capacity have taken place in India resulting in oversupply and corresponding pricing pressures.However, with wider product range and differentiated products as well as through constant innovation, the Company asa whole continues to cater to the higher end European and US markets and the Indian operations commands a majorshare of supplies to the premium brands operating in India.The European operations has been facing lackluster demand in the European market, resulting in lower capacity utilisationand consequent losses. Though the main markets, Germany and France performed rather well, Spain and UK which areprice sensitive markets were under intense pressure. The focus is now on creating new product ranges for customers andthe new collection has been well received. The low cost Romanian facility of the joint venture commenced operations inJanuary 2007. Positive factors to look forward to the future are the progress on product innovation, the start up of the lowcost Romanian facility and the pick up in the Euro economy.The US operations too faced sluggish markets in the US, with production and sales at low levels resulting in losses. Theobjective for the coming year is to restore volumes in the fashion markets with product innovations.

3

The consolidated operations of RUDPL for the period ended March 31, 2007 had sales (including export incentives) ofRs.510.75 crores and incurred a loss after tax of Rs.59.88 crores.Raymond Zambaiti Private LimitedThe Company, a 50:50 joint venture with reputed Italian manufacturer, Cotonoficio Honegger, aimed at manufacturingfine cotton shirting fabric for premium international customers and domestic brands has come up on stream during theyear. The Company’s state-of-the-art production facilities at Kagal, Kolhapur commenced commercial production onOctober 1, 2006. Its products have been well accepted in the international as well as in the domestic markets.The net sales (net of excise) of the Company was Rs.31.69 crores (Previous Year: Rs.Nil). The Company incurred a loss aftertax of Rs.9.96 crores (Previous Year: Rs.0.75 crore) primarily due to trial production related expenditure and gradual rampup of capacity utilisation during the year under review.The Company’s outlook for the current year is encouraging with interest shown by well reputed global and domesticgarment brands to source the Company’s fabrics for their products.Raymond Fedora Private LimitedThe Company, a 50:50 joint venture with Lanificio Fedora S.p.A. Italy, to manufacture, sell and distribute woollen fabricsincluding blankets and shawls has recorded net sales of Rs.22.89 crores (Previous Year: Rs.12.28 crores) for the year underreview and has incurred a loss after tax of Rs.14.05 crores (Previous Year: loss of Rs.2.01 crores). The Company hascommenced exports of woollen fabrics. In spite of stiff competition in the international market, with improved marketingefforts and stabilisation of the production process, the prospects of a positive impact on the current year working of theCompany look promising.Gas Apparel Private LimitedThe Company, a 50:50 joint venture with Grotto S.p.A. of Italy, the owner of the internationally renowned “Gas” brand, hasbeen set up during the third quarter of the year, to sell casual apparel and accessories. The “Gas” brand would providequality, versatile fashion and a lifestyle image to a young cosmopolitan, international and trend conscious customerprofile. The brand has been launched in New Delhi and Mumbai as part of the first phase.Raymond Europe S.R.L.The Company has, with a view to providing world class design inputs to the apparel brands of its subsidiaries, RaymondApparel Limited and Colorplus Fashions Limited, set up a new design studio in Italy in joint venture with CotonoficioHonegger, Italy in September 2006. The design studio’s continuous input has helped our brands to evolve in line withinternational fashion trends. For the period ended March 31, 2007 the Company earned a profit after tax of Rs 4.35 lakhs.AWARDSTextiles Division received the following awards during the year:● Chhindwara unit received the National Safety Award from the Ministry of Labour and Employment, Government of

India for outstanding performance in Industrial Safety during the Award year 2005 in achieving “accident free year”.● Thane unit received the first prize – State Level Award for Excellence in Energy Conservation and Management from

the Maharashtra Energy Development Agency in the Textile sector for the year 2005.Files and Tools Division received the following awards during the year:● Star Performers in Product Group for 2004-05 – Silver Shield by Engineering Export Promotion Council in recognition of the

Division achieving outstanding exports amongst the Medium Enterprises – Hand Tools category for the year 2004-05.● International Trade Awards 2006-07 from CNBC TV18 as outstanding Exporter of the year in Engineering and Machine

Tools category.EXPORTSAggregate exports of all Divisions (including the erstwhile denim division upto July 31, 2006) was Rs. 255 crores (PreviousYear: Rs.310.72 crores).CONSOLIDATED ACCOUNTSIn accordance with the requirements of Accounting Standard AS 21 prescribed by The Institute of Chartered Accountantsof India, the Consolidated Accounts of the Company and its subsidiaries is annexed to this Report.SUBSIDIARIESDomesticRaymond Apparel LimitedThe gross turnover, net of discounts of the Company was higher by 24% at Rs. 237.09 crores (Previous Year: Rs. 189.84crores). Profit after tax was lower at Rs. 10.54 crores (Previous Year: Rs. 14.86 crores) mainly due to costs of setting up ownretail network.During the year under review, with a view to broaden the premium profile of its brands and provide a unique shoppingexperience to customers, the Company continued with its retail thrust through new store openings. With the increasedretail penetration and emphasis on product innovation, the Company’s Brands – “Park Avenue”, “Parx”, “Manzoni” haveattained leadership positions in their respective segments.With the objective of broadening its product offering further, the Company launched “ZAPP!” a premium range brand inkids’ wear during the course of the year, for which exclusive brand stores were opened. The Company also launched anew brand “Notting Hill”, to cater to the popular price segment of the market. Aiding in this foray has been the group’sdesign studio in Italy which provides it with an international edge.With the Company’s focus on exclusive, Company owned, high quality retail stores, separate dedicated teams for alldistribution channels, extensions of existing brands and new brand launches, coupled with an industry wide explosion innew retail format stores, the future outlook is positive.

4

Colorplus Fashions LimitedThe gross turnover of the Company was higher at Rs.120.94 crores (Previous Year: Rs.101.88 crores). Net profit after taxes,was Rs.13.13 crores (Previous Year: Rs.16.90 crores), mainly due to costs incurred for setting up infrastructure for design,product development and expansion of own retail network.The Company constantly endeavours to achieve high visibility and retail thrust. During the year, the Company maintainedits leadership position through a number of innovative features in production, warehousing and marketing processes apartfrom products. The Company continues to endeavour to maintain its leadership position in premium casual wear segment.A range of men’s accessories has also been introduced, and its design studio in Chennai has been strengthened further.The Company also invested in the share capital of Gas Apparel Private Limited during the year.Silver Spark Apparel LimitedThe gross turnover of the Company was Rs.72.59 crores (Previous Year: Rs.55.60 crores). The Company achieved net profitafter tax of Rs.2.65 crores (Previous Year: Loss Rs.4.80 crores) during the year under review.The Company is exporting its products to reputed international Brands, against repeat orders, demonstrating theiracceptance of the quality and service levels offered. The Company has also been imparting continuous operator trainingto improve efficiencies and quality standards. During the year, the Company installed another jacket line and is in theprocess of further expanding its jacket capacity as well as setting up Made-to-Measure facilities.Everblue Apparel LimitedThe Company incurred a loss of Rs.5.49 crores (Previous Year: Loss of Rs.11.96 crores) during the year under review.On August 8, 2006, ‘Raymond UCO Denim Private Limited’ entered into a Conducting Agreement with the Company,under which the Company’s facilities are being used by Raymond UCO Denim Private Limited for manufacture of denimwear on a conducting basis for a fee. After initial teething problems, operations are now stabilising and productionefficiencies improving.Celebrations Apparel LimitedThe gross turnover of the Company was Rs.5.27 crores (Previous Year: Rs.1.09 crore). The Company incurred a loss of Rs.0.91crore (Previous Year: Loss of Rs.1.51 crore).During the year under review, the Company focused on imparting training to operators, obtaining manufacturing consistencyand operational efficiencies. The Company has met the quality standards set by reputed national brands. The Companyhas increased its shirt manufacturing capacity from 2,000 shirts to 3,000 shirts per day.Hindustan Files LimitedThe net sales (net of excise) of the Company was higher at Rs. 27.69 crores (Previous Year: Rs.22.77 crores). Profit after Taxwas Rs. 2.44 crores (Previous Year: Rs.1.57 crore). Due to its networth becoming positive during the year, the Companyceased to be a sick industrial company under the SICA, in terms of the order passed by the BIFR.The satisfactory performance of the Company during the year under review was achieved against the backdrop ofhigher input costs, primarily steel. This was achieved through improved cost efficiencies.JK Talabot LimitedThe Company’s facility to manufacture files and rasps at Chiplun in Ratnagiri District, Maharashtra, was erected withmachinery imported from MOB Outillage SA, France. The production process, which commenced during the second halfof the period under review, has since stabilised. The Company incurred a loss after tax of Rs.2.73 crores (Previous Year: Lossof Rs.0.95 crore) during the period under review. With increased capacity utilisation during the current year, the performanceis expected to improve.Scissors Engineering Products LimitedThe Company incurred a loss of Rs.0.45 lakh (Previous Year: loss of Rs.26.09 lakhs) during the period under review.Ring Plus Aqua LimitedThe net sales (net of excise) of the Company was higher by 3% at Rs.72.05 crores (Previous Year: Rs.69.66 crores). Net profitafter tax was higher at Rs.7.22 crores (Previous Year: Rs.5.30 crores).The performance of the Starter Gear Division remained steady during the year under review. The sales of gears increasedto 13.92 lakhs nos. (Previous Year: 12.97 lakhs nos.), valued at Rs.41.59 crores (Previous Year: Rs.41.70 crores). The performanceof Shaft Bearings Division improved during the year under review with a sale of 21.8 lakhs nos. (Previous Year: 19.76 lakhsnos.) valued at Rs.23.96 crores (Previous Year: Rs.21.89 crores). Export constituted 59% of the total sales for both divisions.The Company has been able to expand its customer base through offering cost effective products and superior servicelevels.The Company entered into a joint venture with AJ Rose Manufacturing Company, USA in December 2006 called RosePreci-Form Private Limited for manufacture of sheet metal components. The project execution is proceeding as per plan.The expansion project of ring gears is also progressing as per schedule.Pashmina Holdings LimitedDuring the year under review the Company incurred a loss of Rs.2.09 lakhs (Previous Year: Profit of Rs.55.11 lakhs).OverseasJaykayorg AG incurred a loss of CHF 714,450 (Previous Year: Loss of CHF 103,539) for the year ended December 31, 2006.J K (England) Limited recorded a profit of Pound Sterling 13,374 (Previous Year: Loss of Pound Sterling 7,282) for the yearended December 31, 2006.Regency Texteis Portuguesa Limitada, Portugal earned a profit of Euros 11.444,17 (Previous Year: Loss of Euros 64.884,08) forthe year ended December 31, 2006.

5

R & A Logistics INC, USA, a subsidiary of Ring Plus Aqua Limited set up in the USA to provide better service to US basedcustomers, earned a profit of US $ 2,100 (Previous Year: Loss of US $ 836) for the year ended March 31, 2007.

CORPORATE GOVERNANCEYour Company attaches considerable significance to good Corporate Governance as an important step towards buildinginvestor confidence, improve investors’ protection and maximise long term shareholder value. Pursuant to Clause 49 of theListing Agreement with the Stock Exchanges, a compliance report on Corporate Governance has been annexed as partof the Annual Report.

DIRECTORSAt the meeting of the Board of Directors of the Company held on June 23, 2006, Shri I.D. Agarwal was nominated asDirector of the Company. Pursuant to Section 260 of the Companies Act, 1956 and Article 161 of the Articles of Associationof the Company, Shri I.D. Agarwal holds office of Director upto the date of the ensuing Annual General Meeting. TheCompany has received notice under Section 257 of the Act together with requisite deposit from a member signifying hisintention to propose Shri I.D. Agarwal as candidate for the office of Director of the Company.

Shri Nana Chudasama and Shri B.K. Kedia, Directors, retire by rotation and, being eligible, offer themselves for reappointment.

Appropriate resolutions for the reappointment of the aforesaid Directors are being moved at the ensuing Annual GeneralMeeting, which the Board commends for your approval.

AUDITORSMessrs. Dalal & Shah, Chartered Accountants, Statutory Auditors, retire and are eligible for reappointment. You are requestedto appoint Auditors.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company herebystate and confirm that :

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Companyat 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 inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts on a going concern basis.

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

The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956, are given in a separateAnnexure to this Report. This Annexure is not being sent along with this Report to the members of the Company in line withthe provisions of Section 219 (1) (b) (iv) of the said Act. Members who are interested in obtaining these particulars maywrite to the Company Secretary at the Registered Office of the Company. None of the employees listed in the saidAnnexure is a relative of any Director of the Company except for Shri Gautam Hari Singhania who is related to Dr. VijaypatSinghania and Shri Anant Singhania. None of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.

The Company has been exempted by the Central Government vide their letter no. 47/343/2006 –CL-III dated January 11,2007 under Section 212 (8) of the Companies Act, 1956 from attaching a copy of the Balance Sheet, Profit and LossAccount, Report of the Board of Directors and the Report of the Auditors of the subsidiary companies. However, pursuantto Accounting Standard AS 21 issued by The Institute of Chartered Accountants of India, Consolidated Financial Statementspresented by the Company includes the financial information of the subsidiaries.

The Company will make available these documents/details upon request by any member of the Company and itssubsidiaries interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept forinspection by any member at the respective registered offices of the Company and its subsidiary companies.

Deposits of Rs. 9.05 lakhs from 82 depositors which fell due for repayment before the close of the financial year remainedunclaimed by the depositors as on March 31, 2007 and have remained unclaimed upto the date of this Report.

APPRECIATIONYour Directors express their warm appreciation to all the employees at various Units for their diligence and contribution.Your Directors also wish to record their appreciation for the support and cooperation received from the joint venturepartners, dealers, agents, suppliers and the banks.

For and on behalf of the Board

Gautam Hari SinghaniaChairman and Managing Director

Mumbai, April 27, 2007

6

Annexure (1) to the Directors’ ReportInformation pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules, 1988.

A. Conservation of Energy :In continuation with the importance given to Energy Conservation, the Textile Division has put continuous efforts towards EnergyConservation and implemented several Energy saving proposals.

Some of the major measures adopted for the year were as follows :1) Use of energy efficient tubelights.2) Rationalisation in running of water pumps.3) Improvement in condensate recovery of boiler.The Thane unit has bagged First prize “State Level Award for Excellence in Energy Conservation and Management” in appreciation ofthe achievement in Energy Conservation in the Textile sector, an award instituted by Maharashtra Energy Development Agency. InChhindwara unit, some of the measures, which have contributed towards energy savings are :1) Installation of Energy efficient control system with variable frequency drive on suction Fan Motors in LR Ring Frame and KTTM

Ring Frame.2) Interlocking of auxiliary motors with main motor to avoid idle running of auxiliary motors.3) Use of Energy efficient products in Lighting System e.g. Triphosphorous tube, aluminum anodized Reflectors, Electronic chokes,

Time Lag Switch in Lighting System & Rearrangement of Lighting.4) Energy saving through modification of double duct-double motor suction system with single duct single motor on Ring Frame

M/c’s at Worsted Spinning.

In Files and Tools Division following improvements have been implemented for the purpose of energy conservation :

1) Substitution of LDO by LPG in forging furnaces.

2) Installation of power saver unit to optimise electricity consumption for compressor.

B. Technology Absorption :(a) Research and Development (R & D) :

The R&D Department of Textile Division continues to develop new products and finishes for both domestic and overseas market.The major development during the year involved the development of total easy care range of fabrics which maintain theirsmoothness even after machine washing. A new range of wool and wool blended fabrics with excellent moisture managementproperties have also been developed and launched. Furthermore, a new range of fabrics based on specialty fibres such asSeacell, Casein and Soybean blended with wool and polyester were developed and launched. Yet another new range of softand smooth Poleyster Viscose blended suiting fabrics have been developed and marketed with a weight reduction finish.Further, R&D efforts have led to the development of a new range of suiting and jacketing fabrics based on Vicuuna animal fibre.R&D efforts have been directed towards development and evaluation of fabrics based on new range of silver coated fibreswhich have antibacterial properties.

The R&D has also been working towards developing a new range of extra deep black shade. Efforts continue towards thedevelopment of automotive furnishing fabric with flame retardant finish.

The Files & Tools Division has carried out R&D in the new product development.

In order to maintain the leadership of JKFT in files business, 17 new stock keeping units have been developed for the Exportmarket with special features in shape, chip breaking cuts focusing on specific customer applications.

(b) Technology Absorption, Adaptation and innovation :The Textile Division has adopted latest technology in fabric finishing by using new type of finishing machine based on Dolphintechnology.

For the purpose of Process Improvement, The Files & Tools Division has installed Auto Hardening system for better consistency inquality and reduction in operating costs.

C. Foreign Exchange Earnings and Outgo :Textile exports have shown a growth of 8.4 % in terms of quantity & 8.34 % in terms of value over the previous year. The Company hasachieved an increased growth in the last financial year in spite of stiff competition from other exporters of our country and Chinawho continues to be a dominant player and enjoys a positive currency advantage. This has been achieved only with the soleendeavor of constantly servicing the customer with value added products and with the emphasis on enhancing customer base.

Leading brands of US & Europe have been added to our customer’s portfolio. There has been expansion of retail network in theMiddle East & SAARC countries.

Files Division’s endeavor to improve and consolidate its presence in International market continues. The Division has made entry intosome new markets in Africa like Liberia, Monrovia, Ghana & Tobo. The other new markets developed are Romania, St. Peter’s Berg,Russia. In Poland, new account was developed by business tie up with ex file manufacturer. Business presence was strengthened insome of the European & other markets like, Czech Republic, Estonia, Lithuania etc. Division has achieved significant growth inEuropean Markets during the year under review. The Division will strengthen its presence in USA by tie up with erstwhile file manufacturer& co-branding in America, Canada and Latin America and also try to make entry in Scandinavian countries, Hungary, Netherlands &Central Asian counties like Iran, Lebanon, Israel, Jordan & Yemen in the current year. During the year under review Division has madeentry in countries like Saudi Arabia, Dubai, Syria, Finland, Poland, Turkey for Hand & Agri Tools products.

The particulars regarding foreign exchange earnings and outgo are given in Schedule 16 - Notes forming part of the Accounts.

7

Form ‘A’[Forming part of Annexure (1)]

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGYA. POWER AND FUEL CONSUMPTION

Purchased Own generation(through Diesel Generator/

Steam Turbine)

Current Previous Current PreviousYear Year Year Year

1. Electricitya) Total units (KWH in thousands)

Textiles 57211 79321 66033 26668Files & Tools 13272 15671 126 112Denim 5254 11264 17913 * 48279

b) Total Amount (Rupees in lacs)Textiles 2623 3001 1775 1047Files & Tools 637 624 17 11Denim 206.86 405.90 514.70 1540.25

c) Units/per Litre of Diesel OilTextiles — — 3.05 3.02Files & Tools — — 4.80 3.98Denim — — 2.41 3.33

d) Units/per Kg. of CoalTextile — — 0.93 0.58Denim — — 0.58 0.58

e) Cost per unit (Rs.)Textiles 4.58 3.78 2.69 3.92Files & Tools 4.80 3.98 13.46 9.83Denim — 3.60 — 3.19* 647.92 lacs KWH units generated through steam turbine (Previous year 358.32 lacs KWH units)

AverageTotal Total Cost Rate per

Quantity (Rs. lacs) Unit (Rs.)

2. Coal (M.T.)a) Textile Division

Current Year 79904 1607 2011Previous Year 52620 1136 2159

b) Denim Division * *Current Year 22720 487.72 2146.65Previous Year 61266 1230.73 1576.56

3. Furnace Oil (Lac Litres)a) Textile Division

Current Year 71.27 1393.87 19.56Previous Year 58.48 1082.56 18.51

b) Files DivisionCurrent Year 3.69 70.42 19.08Previous Year 3.50 59.87 17.11

c) Denim DivisionCurrent Year 11.65 239.21 20.53Previous Year 29.48 490.95 12.18

4. Diesel Oil (Lac Litres)a) Textile Division

Current Year 4 158 39Previous Year 3 98 29

b) Files & Tools DivisionCurrent Year 1 30 28Previous Year 3 83 26

c) Denim DivisionCurrent Year – 17 40Previous Year 4 138 24

5. LPG (Kgs.)a) Textile Division

Current Year 108972 46 42Previous Year 47649 20 41

b) Files & Tools DivisionCurrent Year 76379 35 46Previous Year 30055 14 48

c) Denim DivisionCurrent Year 76140 27 35Previous Year 143974 56 35** 27679 MT used for CPP (Previous year 52248 MT)

B. CONSUMPTION PER UNIT OF PRODUCTIONUnit Standard Current Previous

(if any) Year YearElectricitya) Fabrics KWH/Metre — 4.13 4.17b) Engineers’ Steel Files KWH/Piece — 0.23 0.26c) Denim KWH/Metre — 2.17 2.14

8

MANAGEMENT DISCUSSION AND ANALYSISECONOMIC OVERVIEW:With a strong GDP growth rate of 9.5% in 2006, backed by an excellent performance in manufacturing and service sectors,the Indian economy is experiencing a growth thrust in recent times, with India emerging as one of the fastest growingeconomies. On account of improved FDI inflow and healthy foreign exchange reserves, the Indian Rupee has becomestronger. Despite the same, with increased focus on exports, the export target of $125 billion for the FY 2006-07 was achieved.With increased globalisation and India’s growth story translating into reality, the Indian capital markets have moved in syncwith global stock market indices. All this augurs well for Indian businesses going forward. However, in the prevailing environmentof strong economic growth and buoyant investment climate, rising inflation rate has emerged as a threat.

SEGMENT ANALYSIS AND REVIEW:

The key business segments of the Company are Textile and Files & Tools Divisions. The erstwhile denim division of theCompany was combined with the denim business of UCO NV, Belgium, to form a 50:50 joint venture from August 1, 2006.The same is therefore not included as a business segment in the current year, and consequently the current year financialsare not strictly comparable with the previous year.

A. TEXTILE DIVISIONIndustry ConditionsThe quota-free era has benefited the Indian textile industry and has put India ahead of its regional peers in terms ofexport of value-added products. While the export for value added products is growing, resulting in an increase inIndia’s market share, the favourable product-mix has contributed to higher realisations and better margins. Incontinuation of its policy to support the Indian textile sector, the Government of India had allocated TUF subsidies of$124 million for investments in the sector. This along with increasing FDI in retail has provided huge opportunities toIndian textile players. Internationally, fashion cycles are becoming shorter, which provides opportunities to largevertically integrated players who can source domestically and provide a one-stop solution to the global retailers whoinvest in India.

The buoyant Indian economy has led to higher disposable incomes. Consumer preferences are changing in terms of stylesand fashion preferences and more and more consumers are shifting towards high end value added products necessitatingefficient service coupled with brand offerings. This provides new opportunities for the textile and apparel industry.

Many large integrated players have recognised the changing trends and are vying for their slice of the retail piegiven that retail in India is at an inflexion point and organised retail is expected to grow at a CAGR of more than 20%over the next five years as suggested by many research reports. A strong brand image, world class productionfacilities, further expansion of the existing distribution network and emphasis on retail would be the keys to maintainingmarket leadership by your Company in the textile and clothing industry.

Opportunities and ThreatsInternational players are seeking manufacturers with vertically integrated product development facilities, and abilityfor managing quality and costs. Though India is being recognised in this regard and sourcing of value-addedproducts from India is increasing, China continues to be a dominant player in the market with better infrastructurefacilities. With its currency in an advantageous position and likely removal of quota restrictions in 2008 by US, China isa stronger competitor in exports as well as in the domestic market.

The Company is experiencing pressure on margins due to severe competition from other low-cost countries andstronger Indian Rupee vis-à-vis the US dollar.

There is also a threat of high inflation rate as the prices of commodities have been increasing over the past threequarters. In its efforts to combat inflation, the Central Bank’s actions over the year have resulted in an increasinginterest rate scenario, which in turn could cause rupee to appreciate against the dollar impacting exports.

Textile being a labour intensive industry, rising labor and skilled human resource costs can put pressure on margins.

In order to take advantage of quota-free era, textile and apparel industry require huge investments in infrastructureto improve efficiencies and productivity.

The textile/apparel manufacturing and retail space is increasingly witnessing domestic players tying up with foreigncompanies in order to have access to the latest technology and processes and offer internationally reputed brandsto Indian consumers. Thus Indian companies are increasingly competing with foreign textile players and with foreignbrands in the retail space.

Further, inflows of spurious fabric material, counterfeit and fakes into India continue despite government measures tocurb the same.

The retail boom in India and entry of international retailers will open doors for domestic sourcing from large integratedplayers who can offer one-stop solutions. Also, alliances with international companies will aid in moving up the valuechain and establishing a global presence.

9

Textile Division Overview

The Company is a market leader in the textiles sector in India, has a powerful brand ‘Raymond’ and strong retailpresence in the form of ‘The Raymond Shop’ (‘TRS’) domestically. The trend in the textile and retail sectors has beenin line with the Company’s expectations. The Company’s long term strategy for establishing itself as a preferredsupplier of value-added premium fabric in the international markets, has started yielding results. The Company isbecoming a One Stop Shop for premium international customers.

The Company is now concentrating on new avenues to increase sales and is geared up to meet opportunities forgrowth in new market segments like corporate-wear, service industry, hospitality industry etc. which are emerging asbig segments for textile manufacturers.

The export and domestic market opportunity is being tapped through the following avenues:

• setting up of a design studio in Italy in a joint venture, for cotton shirting fabric, which is fully operational andproviding design inputs for the products;

• setting up of garmenting facilities for factored exports;

• setting up a green field manufacturing facility at Vapi with latest machinery, and providing efficient and costeffective production lines;

• focus on product innovation with new blends & new finishes leading to increased market penetration andcommensurate increase in the customer base in the European market;

• expansion of retail network in the domestic market as well as in the Middle East and SAARC nations.

The above capabilities would also enable the Company face the competition in the domestic market – from bothdomestic and international brands. The Company plans to invest significantly in the coming years in strengtheningand extending the product offerings under its brand and expanding its marketing and distribution network.

Performance Highlights

The Company is dedicated to achieving its long term goals by implementing its business strategies. The result is anincrease in net revenues and profits despite the fierce competition in the domestic and international markets. The netsales (net of excise and discounts) of the textile division grew from Rs.868.44 crores to Rs.992.22 crores, an increase of14%. The growth in revenues was driven by both volume increases and increases in price realisations.

Market Share and Retail Network

The Company is the market leader in India and strives to maintain its market share by aggressively expanding itsdistribution network in both India and neighbouring countries.

The focus on retaining market leadership through expansion of the Retail Shop network continues unabated. TheCompany has retail presence by way of its Exclusive Brand Shops (The Raymond Shop) and is further exploring newretail formats to extend coverage in the country. A flagship store of 10000 sq. ft. was recently opened in Mumbaiwhich houses all Raymond brands under one roof.

Export

The Company has made sustained efforts to increase its presence in the international markets. The Company’s widecustomer base, joint ventures and the ability to provide factored garments to its customers through its wholly ownedsubsidiary, enables it to focus on exports. Total export sales of the division for the year under review was Rs. 109.9crores, a growth of 10% over previous year.

Product Development

The Company strives to develop and provide exclusive and innovative products under its brand. Various productswere developed and introduced during the year under review, using different fibers and finishes. This has helped inretaining market share.

Some of the products introduced were:

· Chairman’s Collection

— Vicuuna : Exquisite suiting developed from Vicuuna and Super 220s wool.

— Pashmina : Luxurious suitings made using Pashmina and Super 200s wool.

· Prima Frost : Poly-wool fabrics with excellent comfort and cool feel made using the latestmoisture management technology.

· Porta Nouva : A range of poly-wool blended fabric using finer yarn for improved handle.

· Black Pearl : Collection of pure black fabrics in structured, self and micro designs.

· La Sensation : Poly Viscose blended fabrics with soft and pliable handle at attractive price point

10

Raw Material

Wool prices have shown an upward trend due to a severe drought in Australia. Alternate vendors have beendeveloped in other countries like South Africa to mitigate the risk of higher price. Polyester fibre prices are presentlystable.

Production

The Company has completed the project for capacity expansion of its Textile Division by setting up a greenfield plantat Vapi, Gujarat. The plant uses the most recent technology and has imported the latest, high speed efficientmachinery. The commercial production for the full capacity of 6 million metres has commenced during the year.

The Company’s joint ventures, Raymond Fedora Private Limited with M/s. Lanificio Fedora S.p.A. Italy for CardedWoollen business and Raymond Zambaiti Private Limited with Zambaiti Group of Italy, for cotton shirting fabric, havestabilised production during the year under review. The plants are fully operational.

B. FILES & TOOLS DIVISION

The Division is engaged in manufacture and marketing of Steel Files, HSS Cutting Tools (mainly drills) & merchantingactivities in Hand and Agri Tools. In the current year, the Division has tried to consolidate its position in Hand and AgriTools segments.

Industry Outlook

The Steel Files business is mature with the application of files coming down in developed countries owing to highlevels of automation and availability of alternate tools. The HSS Cutting Tools business, including drills, is internationallya growing business. However, China continues to dominate the overseas market for drills business. The Division foreseesa reasonable potential for growth in Hand and Agri Tools business segments in coming years commensurate withgrowth trends in industry and agriculture in India.

Opportunities and Threats

Cheap imports of cutting tools, presence of spurious products in the market, constraints on improving selling pricesproportionate to rise in input costs, competition from China and competition from local brands and the unorganisedsector will continue to have an impact on margins.

Division Overview

The Division endeavours to counter the domestic/international competition through cost reduction and upgradationof the manufacturing process/practices by value engineering. The issue of rising input cost is being tackled by costeffective sourcing of materials, services and research & development efforts. In order to improve margins and efficiency,the division has continued manpower rightsizing. These improvements have controlled process costs and given aproduct which is of better quality and finish and is on par with international products. The Division is making efforts toimprove its customer service level through Lead time & OTIF monitoring.

The production process of J K Talabot Limited, a joint venture of the Company with MOB Outillage SA, France, formanufacture of files & rasps at Chiplun has stabilised commercial production during the year under review.

The Division has also begun consolidating its position in Hand Tools and Agri Tools segments and the market responsehas been encouraging. Inroads have been made into international markets for hand tools business in East Asia andEurope. More thrust is now being given to Hand Tool business through super malls/retail channels to reach theend users.

Efforts to improve and consolidate its presence in international market continue with entry into new markets in Africaand further strengthening presence in Europe.

Performance and Review of Operations

The Division continues to remain the market leader in files segment in the domestic market and the largest producerof files in the world. The overall performance of the division was satisfactory. Export sales recorded growth of 8% invalue terms compared to the previous year. The Division has been improving its presence in international market byleveraging its strong brand image, high quality products and marketing tie-ups.

The drill sales is lower by around 10%, compared to the previous year, basically due to stiff price competition in thedomestic market and competition from low priced Chinese drills in International markets.

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.

11

— 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 accountingrequirements.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controlssystems and suggests improvements for strengthening them. The Company has a strong Management InformationSystem which is an integral part of the control mechanism.

The Company has successfully implemented an enterprise wide solution (ERP) in two of its major textile plants and isin the process of covering all its businesses, planning and accounting processes.

RISK MANAGEMENT:

The Company is exposed to risks from market fluctuations of foreign exchange, interest rates and commodity pricesand business risk.

Foreign Exchange Risk

The Company’s policy is to systematically hedge its long term foreign exchange risks as well as short term exposuresin line with its hedging policy.

Interest rate risk

The Company is proactively using derivatives for foreign currency borrowings to hedge interest rate risk and minimiseinterest cost.

Given the interest rate fluctuations, the Company has adopted a prudent and conservative risk mitigating strategy,as a result of which interest rate fluctuations are not expected to pose a significant risk nor are they likely to have anymaterial impact on the Company’s profitability.

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, proactivemanagement of vendor development and relationships. The Company’s strong reputation for quality, productdifferentiation and service and the existence of a strong brand image and a strong marketing network mitigates theimpact of price risks 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 theCompany are exposed to certain operating business risks, which are managed by regular monitoring and correctiveactions.

ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policyrequires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance ofstatutory and industrial requirements for environment protection and conservation of natural resources to the extentpossible. The Company is currently implementing acid-free, a zero-pollution process, at all plants for file manufacturing.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas ofbusiness. Various HR initiatives are taken to align the HR Policies to the growing requirements of the business.

The Company has a structured induction process at all locations and management development programmes toupgrade skills of managers. Objective appraisal systems based on KRAs are in place for senior management staff.

Technical and safety training programmes are given periodically to workers.

Industrial relations remained generally cordial in all the plants.

CAUTIONARY STATEMENT

Statement in this 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 lawsand regulations. Actual results could differ materially from those expressed or implied. Important factors that couldmake a difference to the Company’s operations include raw material availability and prices, cyclical demand andpricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developmentswithin India and the countries in which the Company conducts business and other incidental factors.

12

CORPORATE GOVERNANCE REPORTINTRODUCTIONCorporate Governance has become an integral part of the business aligning the organisation to the best internationalpractices of good governance. This encompasses the value systems of integrity, fairness, transparency and adoption ofthe highest standards of business ethics which aims to benefit all the stakeholders.The detailed report on implementation by the Company, of the Corporate Governance Code as incorporated in Clause49 of the Listing Agreement with the Stock Exchanges, is set out below :A. MANDATORY REQUIREMENTS1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE :

Your Company follows good corporate governance practices aimed at maximising value for shareholders, whileensuring fairness to all segments of stakeholders – customers, employees, investors, vendors, dealers, financiers, stateand central governments and society at large. Ensuring total transparency in operations and inspiring the confidenceand trust of stakeholders are of paramount importance to the Company and corporate governance is basic to thecorporate conduct of business.Your Company makes best endeavours to uphold and nurture these core values in all facets of its operations andaims to increase and sustain its corporate value through growth and innovation.Your Company is fully committed to and continues to follow procedures and practices in conformity with the Code ofCorporate Governance contained in the Listing Agreement.

2. BOARD OF DIRECTORS :COMPOSITION AND CATEGORYThe Board of Directors of the Company consists of eminent persons with considerable professional expertise andexperience in business and industry, finance, management, legal and marketing. The composition of the Board ofDirectors with reference to number of Executive and Non-Executive Directors, meets with the requirements of Clause49 (I) (A) of the Listing Agreement.The present strength of the Board of Directors is ten, whose composition is given below :— one Promoter, Executive Director— two Promoter, Non-Executive Directors— one Non-Promoter, Executive Director— one Non-Executive, Non-Independent Director— five Independent, Non-Executive DirectorsNone of the Directors on the Board is a member of more than ten Committees and Chairman of more than fiveCommittees across all companies in which they are Directors.The composition of the Board of Directors, the number of other Directorship and Committee positions held by theDirector, of which the Director is a Member/Chairman are as under :

Name of Director Category of Directorship in No. of Board CommitteesDirectorship other companies (*) (other than Raymond Limited)

in which Chairman/Member

Chairman Member

Dr. Vijaypat Singhania Promoter, 6 Nil NilChairman Emeritus Non-ExecutiveShri Gautam Hari Singhania Promoter, 8 Nil 1Chairman and Managing Director ExecutiveShri B. K. Kedia Independent, 8 Nil Nil

Non-ExecutiveShri Nana Chudasama Independent, 4 Nil Nil

Non-ExecutiveShri Anant Singhania Promoter, 2 Nil Nil

Non-ExecutiveShri B. V. Bhargava Independent, 10 3 5

Non-ExecutiveShri U. V. Rao Independent, 5 3 2

Non-ExecutiveShri I. D. Agarwal Independent, 1 Nil 1

Non-ExecutiveShri Nabankur Gupta Non-Independent, 7 1 1

Non-ExecutiveShri P. K. Bhandari Non-Promoter, 10 2 1Wholetime Director and Group President Executive

(*) – excludes Alternate Directorships, Directorships in Indian Private Limited Companies and Foreign Companies and Membership ofManaging Committees of various bodies.

Only memberships of Audit Committee and Shareholders’/Investors‘Grievances Committee are considered.

13

BOARD PROCEDUREThe Board meets atleast once a quarter to review the quarterly performance and the financial results. The BoardMeetings are generally scheduled well in advance and the notice of each Board Meeting is given in writing to eachDirector. All the items on the Agenda are accompanied by notes giving comprehensive information on the relatedsubject and in certain matters such as financial/business plans, financial results, detailed presentations are made. TheAgenda and the relevant notes are sent in advance separately to each Director and only in exceptional cases, thesame is tabled at the meeting. The Board is also free to recommend the inclusion of any matter for discussion inconsultation with the Chairman.

The information as specified in Annexure IA to Clause 49 of the Listing Agreement is regularly made available to the Board.

To enable the Board to discharge its responsibilities effectively, the members of the Board are briefed at every BoardMeeting, on the overall performance of the Company, with presentations by functional heads. Senior Management isinvited to attend the Board Meetings so as to provide additional inputs to the items being discussed by the Board.

The Board’s role, functions, responsibility and accountability are clearly defined. In addition to matters statutorilyrequiring Board’s approval, all major decisions involving policy formulation, strategy and business plans, annual operatingand capital expenditure budgets, new investments, details of joint ventures, sale of business unit/division, compliancewith statutory/regulatory requirements, major accounting provisions and write-offs are considered by the Board.

The Minutes of the Board Meetings are circulated in advance to all Directors and confirmed at subsequent Meeting.The Minutes of Audit Committee and other Committees of the Board are regularly placed before the Board.

ATTENDANCE OF EACH DIRECTOR AT THE BOARD MEETINGS AND THE LAST ANNUAL GENERAL MEETINGDuring the financial year ended March 31, 2007, six Board Meetings were held on May 4, 2006, June 23, 2006, July 20,2006, October 31, 2006, December 4, 2006 and January 19, 2007. The gap between two Board Meetings did notexceed four months.

The attendance of each Director at Board Meetings and the last Annual General Meeting (AGM) is as under :

Name of the Director No. of Board Attendance at lastMeetings attended AGM held on June 23, 2006

Dr. Vijaypat Singhania 6 Yes

Shri Gautam Hari Singhania 6 Yes

Shri B. K. Kedia 6 Yes

Shri Nana Chudasama 4 No

Shri Anant Singhania 6 Yes

Shri B. V. Bhargava 5 Yes

Shri U. V. Rao 6 Yes

Shri I. D. Agarwal 3 N.A *

Shri Nabankur Gupta 5 No

Shri P. K. Bhandari 6 Yes

* Shri I.D. Agarwal was not a Director of the Company at the time of AGM.

3. AUDIT COMMITTEE :BROAD TERMS OF REFERENCEThe Audit Committee of the Board of Directors of the Company, inter-alia, provides assurance to the Board on theadequacy of the internal control systems and financial disclosures.

The Terms of Reference of the Audit Committee are wide enough to cover the matters specified for Audit Committeesunder Clause 49 of the Listing Agreements as well as in Section 292A of the Companies Act, 1956 and inter- alia includes:

a. oversight of the Company’s financial reporting process and the disclosure of its financial information to ensurethat the financial statement is correct, sufficient and credible;

b. recommending to the Board, the appointment, reappointment and, if required, the replacement or removal ofthe Statutory Auditor and the fixation of audit fees;

c. approval of payment to Statutory Auditors for any other services rendered by the Statutory Auditors;

d. reviewing, with the management, the annual financial statement before submission to the Board for approval,with particular reference to :

i. matters required to be included in the Director’s responsibility Statement which forms part of the Directors’Report pursuant to Clause 2AA of Section 217 of the Companies Act, 1956;

ii. changes, if any, in accounting policies and practices and reasons for the same;

iii. major accounting entries involving estimates based on the exercise of judgment by management;

iv. significant adjustments made in the financial statements arising out of audit findings;

14

v. compliance with listing and other legal requirements relating to financial statements;vi. disclosure of any related party transactions;vii. qualifications in the draft audit report.

e. reviewing with the management, the quarterly financial statements before submission to the Board for approval;f. reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal

control systems;g. reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,

staffing and seniority of the official heading the department, reporting structure coverage and frequency ofinternal audit;

h. discussion with internal auditors any significant findings and follow up thereon;i. reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected

fraud or irregularity or a failure of internal control systems of material nature and reporting the matter to the Board;j. discussion with statutory auditors before audit commences, about the nature and scope of audit as well as

post-audit discussion to ascertain any area of concern;k. carrying out any other function as mentioned in the terms of reference of the Audit Committee.In fulfilling the above role, the Audit Committee has powers to investigate any activity within its terms of reference, toseek information from employees and to obtain outside legal and professional advice.The Audit Committee while reviewing the Annual Financial Statements also reviewed the applicability of variousAccounting Standards (AS) issued by The Institute of Chartered Accountants of India. Compliance of the AS asapplicable to the Company has been ensured in the Financial Statements for the year ended March 31, 2007.COMPOSITIONThe Audit Committee comprises of four Directors, all of whom are Non-Executive, Independent Directors except oneDirector who is Promoter, Non-Executive. The Audit Committee is constituted in accordance with the provisions ofClause 49 (II) (A) of the Listing Agreement and Section 292A of the Companies Act, 1956. All these Directors possessknowledge of corporate finance, accounts and company law. One of the member acts as Chairman of the CommitteeMeetings. The Wholetime Director & Group President, President (Finance) and Director (Finance) of the Company arepermanent invitees at the meetings of the Committee. The Statutory Auditors, the Cost Auditors and the InternalAuditors are also invited to the Meetings whenever required. The quorum for the Audit Committee Meetings is twomembers. The Company Secretary acts as Secretary to the Committee.The Minutes of the Audit Committee Meetings are noted by the Board of Directors at the subsequent Board Meeting.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

MEETINGS AND ATTENDANCEDuring the financial year ended March 31, 2007, four Audit Committee Meetings were held on May 4, 2006, July 20,2006, October 31, 2006 and January 19, 2007. The gap between two meetings did not exceed four months.

The Audit Committee also met prior to the finalisation of accounts for the year ended March 31, 2007.

The attendance at the Audit Committee Meetings is as under :

Name of the Director No. of meetings attended

Dr. Vijaypat Singhania 3

Shri B. K. Kedia 4

Shri B. V. Bhargava 4

Shri U.V. Rao 3

The Company Secretary was present at all the above meetings.

Shri B. K. Kedia, who acts as Chairman of the Audit Committee Meetings was present at the Eighty First AnnualGeneral Meeting of the Company held on June 23, 2006 to answer the shareholders’ queries.

INTERNAL AUDITORSThe Company has appointed a firm of Chartered Accountants as Internal Auditors to review the internal controlsystems of the Company and to report thereon. The report of the Internal Auditors is reviewed by the Audit Committee.

15

4. REMUNERATION COMMITTEE :TERMS OF REFERENCE— reviewing the overall compensation policy, service agreements and other employment conditions of

Managing/Wholetime Director(s).— reviewing the performance of the Managing/Wholetime Director(s) and recommending to the Board, the quantum

of annual increments and annual commission.COMPOSITIONThe Remuneration Committee comprises of four Directors, all of whom are Independent, Non-Executive Directors,except one Director who is promoter, Non-Executive. The Chairman of the Committee is an Independent,Non-Executive Director nominated by the Board.The composition of the Remuneration Committee is as follows :

Name of the Director Position Category

Dr. Vijaypat Singhania Member Promoter, Non-Executive

Shri B. V. Bhargava Chairman Independent, Non-Executive

Shri B. K. Kedia Member Independent, Non-Executive

Shri Nana Chudasama Member Independent, Non-Executive

MEETING AND ATTENDANCEThe Committee met once on May 4, 2006. Shri B.V. Bhargava, Shri B.K. Kedia and Shri Nana Chudasama had attended the meeting.REMUNERATION POLICYA. Remuneration to Non-Executive Directors

The Non-Executive Directors are paid remuneration by way of Commission and Sitting Fees. The shareholders’approval is being sought at the ensuing Annual General Meeting for payment of commission of Rs.25 lakhs to theNon-Executive Directors of the Company for a two year period for the financial years commencing April 1, 2006to March 31, 2007 and April 1, 2007 to March 31, 2008. Non-Executive Directors are paid sitting fees @ Rs.10,000 foreach meeting of the Board or any Committee thereof attended by them.The compensation of Non-Executive Directors is approved unanimously by the Board.None of the Non-Executive Directors has any material pecuniary relationship or transactions with the Company.

B. Remuneration to Chairman and Managing Director and Wholetime Director(s)The appointment of Chairman and Managing Director and Wholetime Director(s) is governed by resolutionspassed by the Board of Directors and shareholders of the Company, which covers the terms of such appointmentand remuneration read with the service rules of the Company. Payment of remuneration to Chairman and ManagingDirector and Wholetime Director(s) is governed by the respective Agreements executed between them and theCompany. Remuneration paid to Chairman and Managing Director and Wholetime Director(s) is recommendedby the Remuneration Committee, approved by the Board and is within the limits set by the shareholders at theAnnual General Meetings. The remuneration package of Chairman and Managing Director and WholetimeDirector(s) comprises of salary, perquisites and allowances, commission and contributions to Provident and otherRetiral Benefit Funds as approved by the shareholders at the Annual General Meetings. Annual increments arelinked to performance and are decided by the Remuneration Committee and recommended to the Board forapproval thereof.The remuneration policy is directed towards rewarding performance, based on review of achievements. It isaimed at attracting and retaining high caliber talent.There is no separate provision for payment of severance fees under the resolutions governing the appointment ofChairman and Managing Director and Wholetime Director(s).Presently, the Company does not have a scheme for grant of stock options or performance linked incentives forits Directors.

DETAILS OF REMUNERATION TO ALL THE DIRECTORS FOR THE YEAR ENDED MARCH 31, 2007NON-WHOLETIME DIRECTORS

Name of the Director Commission *(Rs.) Sitting Fees (Rs.) No. of Shares heldDr. Vijaypat Singhania 3,21,756 1,15,000 56247

Shri B. K. Kedia 3,21,756 95,000 100

Shri Nana Chudasama 3,21,756 1,45,000 663

Shri Anant Singhania 3,21,756 55,000 233159

Shri B. V. Bhargava 3,21,756 1,05,000 1000

Shri U. V. Rao 3,21,756 1,15,000 Nil

Shri I. D. Agarwal 2,47,708 30,000 Nil

Shri Nabankur Gupta 3,21,756 45,000 Nil

* payable in 2007-08. Excludes Rs.10 Lacs paid for the accounting year 2005-06.

16

MANAGING AND WHOLETIME DIRECTORS

Name of the Director Salary Benefits Commission Service(Rs.) (Rs.) (Rs.) Contract

Shri Gautam Hari Singhania, Chairmanand Managing Director 1,80,00,000 1,62,72,433 1,29,92,000 5 years

Shri P. K. Bhandari, Wholetime Directorand Group President 86,40,000 58,84,415 86,40,000 5 years

5. SHAREHOLDERS’/INVESTORS’ GRIEVANCES COMMITTEE :FUNCTIONSThe Board of Raymond Limited has constituted a Committee of Directors, which inter-alia also functions as‘Shareholders’/Investors’ Grievances Committee’, consisting of three members, chaired by a Non-Executive,Independent Director.

The Committee meets once a month and inter-alia, deals with various matters relating to :

- transfer/transmission/transposition of shares;

- consolidation/splitting of folios;

- issue of share certificates for lost, sub-divided, consolidated, rematerialised, defaced, etc;

- review of shares dematerialised and all other related matters;

- investors’ grievances and redressal mechanism and recommend measures to improve the level of investorservices; and

The Share Department of the Company and the Registrar and Share Transfer Agent, Intime Spectrum Registry Limited[ISRL] (w.e.f September 1, 2006 consequent to takeover of the business of MCS Limited by ISRL) attend to all grievancesof the shareholders and investors received directly or through SEBI, Stock Exchanges, Ministry of Company Affairs,Registrar of Companies, etc.

The Minutes of the Shareholders’/Investors’ Grievances Committee Meeting are noted by the Board of Directors atthe Board Meetings.

Continuous efforts are made to ensure that grievances are more expeditiously redressed to the complete satisfactionof the investors. Shareholders are requested to furnish their telephone numbers and e-mail addresses to facilitateprompt action.

COMPOSITIONThe composition of the Committee of Directors is as under :

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

Shri Nana Chudasama acts as Chairman of Shareholders’/Investors’ Grievances Committee.

COMPLIANCE OFFICERThe Board has designated Shri R. Narayanan, Director – Legal & Company Secretary as the Compliance Officer.

MEETINGS AND ATTENDANCEEleven meetings of the Committee were held during the year April 1, 2006 to March 31, 2007. The meetings were heldon April 28, 2006, June 2, 2006, July 3, 2006, August 1, 2006, September 1, 2006, October 3, 2006, November 1, 2006,December 1, 2006, January 2, 2007, February 1, 2007 and March 1, 2007.

The number of meetings attended by each of the members is as under :

Name of the Director No. of Meetings attended

Shri Nana Chudasama 11

Shri Gautam Hari Singhania 11

Shri P. K. Bhandari 11

DETAILS OF SHAREHOLDERS’ COMPLAINTS RECEIVED, NOT SOLVED AND PENDING SHARE TRANSFERSThe total number of complaints received and replied to the satisfaction of the shareholders during the year endedMarch 31, 2007 were 788. There were no complaints outstanding as on March 31, 2007. The number of pending share

17

transfers were Nil and pending requests for dematerialisation as on March 31, 2007 were 88 which have since beendematerialised.

Shareholders’/Investors’ complaints and other correspondence are normally attended to within seven working daysexcept where constrained by disputes or legal impediments. No investor grievances remained unattended/pendingfor more than thirty days as on March 31, 2007.

6. GENERAL BODY MEETINGS :

a. Location and time, where last three Annual General Meetings were held is given below :

Financial Year Date Location of the Meeting Time

2003-2004 June 30, 2004 Registered Office of the Company at Ratnagiri 11.00 A.M.

2004-2005 June 16, 2005 Registered Office of the Company at Ratnagiri 11.00 A.M.

2005-2006 June 23, 2006 Registered Office of the Company at Ratnagiri 11.00 A.M.

b. Special Resolutions passed at last three Annual General Meetings :

(i) Special resolutions for reappointment of Messrs. Dalal & Shah, Chartered Accountants as Statutory Auditorsof the Company were passed at the Seventy-ninth, Eightieth and Eighty-first Annual General Meetings of theCompany held on June 30, 2004, June 16, 2005 and June 23, 2006 respectively, which were put to vote byshow of hands and were passed unanimously.

(ii) Special resolution approving payment of commission to Non-Executive Directors for the financial year2005-2006 was passed at the Eighty-first Annual General Meeting of the Company held on June 23, 2006,which was put to vote by show of hands and was passed unanimously.

c. Passing of resolutions by Postal Ballot :

No items were passed by resolutions through Postal Ballot during the Financial Year 2006-2007. At the forthcomingAnnual General Meeting also, there is no item on the agenda that needs approval by Postal Ballot.

7. SUBSIDIARIES :

The Company does not have any material non-listed Indian subsidiary whose turnover or net worth (i.e. paid-upcapital and free reserves) exceeds 20 % of the consolidated turnover or net worth respectively, of the listed holdingcompany and its subsidiaries in the immediately preceding accounting year.

8. CODE OF CONDUCT :

The Board of Directors has adopted the Code of Business Conduct and Ethics for Directors and Senior Management.The said Code has been communicated to the Directors and members of the Senior Management. The Code hasalso been displayed on the Company’s website – www.raymondindia.com.

9. INSIDER TRADING :

Code of Conduct for Prevention of Insider Trading

The Securities and Exchange Board of India (SEBI) has, effective February 20, 2002 introduced amendments to theexisting Insider Trading Regulations of 1992 which ordain new action steps by corporates and other marketintermediaries for the purposes of prevention of Insider Trading.

Pursuant to the above requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992 as amended, the Companyhas adopted a ‘Code of Conduct for Prevention of Insider Trading’ (The Code) with effect from October 1, 2002. TheCode is applicable to all Directors and such Designated Employees who are expected to have access to unpublishedprice sensitive information relating to the Company.

Shri R. Narayanan, Director - Legal & Company Secretary has been appointed as the Compliance Officer for monitoringadherence to the Regulations.

10. DISCLOSURES :

a. Disclosure on materially significant related party transactions that may have potential conflict with the interestsof the Company at large.

There are no materially significant related party transactions made by the Company with its Promoters, Directorsor Management, their subsidiaries or relatives, etc. that may have potential conflict with the interests of theCompany at large.

Transactions with related parties as per requirements of Accounting Standard (AS-18 ) – ‘Related Party Disclosures’issued by the Institute of Chartered Accountants of India are disclosed in Note No. 19 of Schedule 16 to theAccounts in the Annual Report.

18

b. Disclosure of Accounting Treatment

In the preparation of the financial statements, the Company has followed the Accounting Standards issued bythe Institute of Chartered Accountants of India. The significant accounting policies which are consistently appliedare set out in the Annexure to Notes to the Accounts.

c. Risk Management

Business risk evaluation and management is an ongoing process within the Company. During the year underreview, a detailed exercise on ‘Risk Assessment and Management’ was carried out covering the entire gamut ofbusiness operations and the Board was informed of the same.

d. Details of non-compliance by the Company, penalties, strictures imposed on the Company by Stock Exchangesor SEBI or any statutory authority, on any matter related to capital markets, during the last three years.

The Company has complied with all requirements of the Listing Agreements entered into with the Stock Exchangesas well as the regulations and guidelines of SEBI. Consequently, there were no strictures or penalties imposed byeither SEBI or the Stock Exchanges or any statutory authority for non-compliance of any matter related to thecapital markets during the last three years.

e. Non-mandatory requirements

Adoption of non-mandatory requirements of Clause 49 of the Listing Agreement are being reviewed by theBoard from time to time.

11. MEANS OF COMMUNICATION :

(i) The Board of Directors of the Company approves and takes on record the quarterly, half yearly and yearlyfinancial results in the proforma prescribed by Clause 41 of the Listing Agreement within one month of the closeof the respective period.

(ii) The approved financial results are forthwith sent to the Listed Stock Exchanges and are published in the leadingnational English newspapers namely The Economic Times and Financial Express (all editions). In addition, thesame are published in local language (Marathi) newspapers namely Maharashtra Times (Mumbai) and Lokmat(Mumbai), within forty-eight hours of approval thereof. The same are not sent to the shareholders separately.

(iii) Pursuant to Clause 51 of the Listing Agreement, all data related to quarter ly financial results ,shareholding pattern, etc. are hosted on the Electronic Data Information Filing and Retrieval (EDIFAR)website www.sebiedifar.nic.in maintained by SEBI in association with the National Informatics Centre, within thetime frame prescribed in this regard.

(iv) The Company’s financial results and official news releases are displayed on the Company’s Websitewww.raymondindia.com.

(v) No formal presentations were made to the institutional investors and analysts during the year under review.

(vi) Management Discussion and Analysis forms part of the Annual Report, which is posted to the shareholders of theCompany.

12. GENERAL SHAREHOLDER INFORMATION:

Detailed information in this regard is provided in the section ‘Shareholder Information’ which forms part of this AnnualReport.

13. COMPLIANCE CERTIFICATE OF THE AUDITORS:

The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governanceas stipulated in Clause 49 of the Listing Agreement with the Stock Exchanges and the same is annexed to theDirectors’ Report and Management Discussion and Analysis.

The Certificate from the Statutory Auditors will be sent to the Listed Stock Exchanges alongwith the Annual Report ofthe Company.

D E C L A R A T I O NAs provided under Clause 49 of the Listing Agreement with the Stock Exchanges, all Board members and SeniorManagement Personnel have affirmed compliance with Raymond Limited Code of Business Conduct and Ethics for theyear ended March 31, 2007.

For Raymond Limited

Gautam Hari SinghaniaMumbai: April 27, 2007 Chairman and Managing Director

19

AUDITORS’ CERTIFICATE ON CLAUSE 49 COMPLIANCE

The Members ofRaymond Limited

We have reviewed the records concerning the Company’s compliance of conditions of Corporate Governance asstipulated in Clause 49 of the Listing Agreement entered into, by the Company, with Stock Exchanges of India, for thefinancial year ended 31st March, 2007.

The Compliance of the conditions of corporate governance is the responsibility of the management. Our examinationwas limited to procedures and implemention thereof, adopted by the Company for ensuring the compliance of theconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements ofthe Company.

We have conducted our review on the basis of the relevant records and documents maintained by the Company andfurnished to us for the review, and the information and explanations given to us by the Company.

Based on such a review and to the best of our information and according to the explanations given to us, in our opinion,the Company has complied with the conditions of Corporate Governance, as stipulated in Clause 49 of the said ListingAgreement.

We further state that, such compliance is neither an assurance as to the future viability of the Company, nor as to theefficiency or effectiveness with which the management has conducted the affairs of the Company.

For and on behalf ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Mumbai, April 27, 2007 Membership No. 33596

20

SHAREHOLDER INFORMATIONRegistered Office : Plot No. 156/H. No.2, Village Zadgaon,

Ratnagiri 415 612,MaharashtraPhone : 95-2352-232514; Fax : 95-2352- 232513Website : www.raymondindia.com

Annual General Meeting : Day, Date and Time : Monday, June 18, 2007 at 11.00 A.M.Venue : Registered Office of the Company at :

Plot No. 156/H. No. 2, Village Zadgaon,Ratnagiri 415 612, Maharashtra.

Financial Calendar :• Financial reporting for the quarter ending June 30, 2007 : End July 2007

• Financial reporting for the half year ending September 30, 2007 : End October 2007

• Financial reporting for the quarter ending December 31, 2007 : End January 2008

• Financial reporting for the year ending March 31, 2008 : End April 2008

Date of Book Closure : June 1, 2007 to June 18, 2007 (both days inclusive)

Dividend :

The dividend as recommended by the Board of Directors, if declared at the ensuing Annual General Meeting, will be paidat par on or after June 19, 2007 to those members whose names appear on the Company’s Register of Members asholders of equity shares in physical form on June 18, 2007. In respect of shares held in dematerialised form, the dividendwill be paid on the basis of beneficial ownership details to be furnished by National Securities Depository Limited andCentral Depository Services (India) Limited for this purpose.

Listing on Stock Exchanges:

The Equity Shares of the Company are listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange ofIndia Limited (NSE). Annual Listing Fees as prescribed have been paid to both the Stock Exchanges for the year 2007-2008.Global Depository Receipts are listed on Luxembourg Stock Exchange and Annual Listing Fees as prescribed has beenpaid to the said Stock Exchange for the calendar year 2007.

Stock Code : Bombay Stock Exchange Limited – 500330

National Stock Exchange of India Limited – Raymond EQ

Demat ISIN No. for NSDL and CDSL – INE301A01014

Stock Market Data :

The monthly high and low quotations and volume of shares traded on BSE and NSE during the year were as follows :

BSE NSE

MONTH HIGH LOW VOLUME HIGH LOW VOLUME(Rs.) (Rs.) (Nos.) (Rs.) (Rs.) (Nos.)

APRIL 2006 604.00 495.10 646312 608.00 462.60 1228917

MAY 2006 625.00 406.85 495652 630.00 408.00 1109686

JUNE 2006 484.00 289.10 974805 483.00 286.50 1427652

JULY 2006 415.00 331.00 723645 415.60 331.00 900245

AUGUST 2006 449.00 359.30 568191 449.00 359.25 1291451

SEPTEMBER 2006 479.00 414.00 493893 474.75 423.00 1153174

OCTOBER 2006 478.00 432.00 483953 472.45 432.00 766828

NOVEMBER 2006 469.90 422.05 180371 470.00 422.00 532927

DECEMBER 2006 465.00 389.10 416500 465.00 364.80 708831

JANUARY 2007 425.00 391.00 935234 429.85 391.00 448596

FEBRUARY 2007 402.90 336.00 1268766 409.95 332.10 1238052

MARCH 2007 414.15 323.90 246390 370.00 325.05 385926

21

BSE NSE

No. of Shares traded 7433712 11192285

Highest Share Price 625.00 630.00

Lowest Share Price 289.10 286.50

Closing share price as on March 31, 2007 341.55 347.45

Market Capitalisation as on March 31, 2007 Rs. 209646 lacs Rs. 213268 lacs

Stock Performance (Indexed) :The performance of the Company’s shares relative to BSE Sensex is given in the chart below :

Registrar and Share Transfer Agent :INTIME SPECTRUM REGISTRY LIMITEDC-13, Pannalal Silk Mills Compound,L.B.S Marg, Bhandup (West),Mumbai – 400 078.Tel : 022-25963838 : Fax : 022-25946969e-mail : mahadevan.iyer@intimespectrum.com ; mangesh.gomane@intimespectrum.come-mail : Exclusive for redressal of Investor Complaints is isrl@intimespectrum.comTime : 10.00 a. m. to 1.00 p. m. and 1.30 p. m. to 4. 30 p. m.Share Transfer System:The transfer of shares in physical form is processed and completed by Registrar & Transfer Agent within a period of seven daysfrom the date of receipt thereof provided all the documents are in order. In case of shares in electronic form, the transfers areprocessed by NSDL/CDSL through respective Depository Participants. In compliance with the Listing Agreement with the StockExchanges, a Practising Company Secretary carries out audit of the System of Transfer and a certificate to that effect is issued.Distribution of shareholding as on March 31, 2007:

No. of equity No. of % of No. of % ofshares held shareholders shareholders shares held shareholdingUpto 500 117704 97.16 8353175 13.61501 to 1000 2162 1.79 1546876 2.521001 to 2000 789 0.65 1106466 1.802001 to 3000 173 0.14 435090 0.713001 to 4000 82 0.07 289828 0.474001 to 5000 50 0.04 226312 0.375001 to 10000 74 0.06 501952 0.8210001 and above 114 0.09 48921154 79.70GRAND TOTAL 121148 100 61380853 100

BS

E S

EN

SE

X

SH

AR

E P

RIC

E O

N B

SE

0

2500

5000

7500

10000

12500

15000

17500

20000

BSE Sensex LowBSE Sensex High

Mar

-07

Feb

-07

Jan-

07

Dec

-06

Nov

-06

Oct

-06

Sep

-06

Aug

-06

Jul-0

6

Jun-

06

May

-06

Apr

-06

100

150

200

250

300

350

400

450

500

550

600

650

700

Share Price Low Share Price High

APRIL 2006 to MARCH 2007

22

Shareholding Pattern as on March 31, 2007:

CATEGORY NO. OF SHARES % OFHELD SHARE CAPITAL

A PROMOTER’S HOLDING1. Promoters

- Indian Promoters 838697 1.37- Foreign Promoters – –

2. Persons acting in concert 20896420 34.04Sub-Total 21735117 35.41

B. NON-PROMOTER’S HOLDING3. Institutional Investorsa. Mutual Funds and UTI 9058458 14.76b. Banks, Financial Institutions, Insurance Companies

(Central/State Government Institutions/Non-GovernmentInstitutions) 11832872 19.28

c. FIIs 2845985 4.64Sub-Total 23737315 38.68

4. OTHERSa. Private Corporate Bodies 2564143 4.18b. Indian Public 11571893 18.85c. NRIs/OCBs 670723 1.09d. GDRs 1101662 1.79

Sub-Total 15908421 25.91GRAND TOTAL 61380853 100.00

Dematerialisation of shares and liquidity:89 % of the equity shares of the Company have been dematerialised as on March 31, 2007. The Company has enteredinto agreements with both National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL) whereby shareholders have an option to dematerialise their shares with either of the depositories.

Status of Dematerialisation as on March 31, 2007 :

PARTICULARS NO. OF SHARES % TO TOTAL CAPITAL NO. OF ACCOUNTSNational Securities Depository Limited 53602102 87.33 57252Central Depository Services (India) Limited 853719 1.39 7957TOTAL DEMATERIALISED 54455821 88.72 65209PHYSICAL 6925032 11.28 55939GRAND TOTAL 61380853 100.00 121148

Outstanding GDRs/Warrants and Convertible Bonds, conversion date and likely impact on equity :Outstanding number of GDRs represent 1101662 equity shares (1.79% of the total share capital) as on March 31, 2007.Each GDR represents 2 underlying equity shares. Since the underlying equity shares represented by GDRs have beenallotted in full, the outstanding GDRs have no impact on the equity of the Company. There are no warrants/convertiblebonds outstanding as at the year end.

Unclaimed Dividends:Pursuant to Section 205C of the Companies Act, 1956, dividends that are unpaid/unclaimed for a period of seven yearsfrom the date they became due for payment are required to be transferred by the Company to the Investor Educationand Protection Fund (IEPF) administered by the Central Government. Given below are the dates of declaration ofdividend and corresponding dates when unpaid/unclaimed dividends are due for transfer to IEPF:

Financial Year Date of declaration of Dividend Due Date for transfer to IEPF1999-2000 June 23, 2000 August 10, 2007

2000-2001 June 22, 2001 July 28, 2008

2001-2002 June 24, 2002 July 30, 2009

2002-2003 June 11, 2003 July 17, 2010

2003-2004 June 30, 2004 August 6, 2011

2004-2005 June 16, 2005 July 22, 2012

2005-2006 June 23, 2006 July 29, 2013

23

Members who have so far not encashed their dividend warrants are requested to have the same revalidated to avoidtransfer to IEPF. Members are advised that no claims shall lie against the said Fund or the Company for the amounts ofdividend so transferred to the said Fund.

Nomination:

Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the sharesshall be transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held inelectronic form is also available with the depository participants as per the bye-laws and business rules applicable toNSDL and CDSL. Nomination forms can be obtained from the Company’s Registrar and Share Transfer Agent.

Electronic Clearing Service:

The Securities and Exchange Board of India has made it mandatory for all companies to use the bank account detailsfurnished by the depositories for crediting dividends through Electronic Clearing Services (ECS) to the investors whereverECS and bank details are available. In the absence of ECS facility, the Company is required to print the bank accountdetails on the dividend warrants. This ensures that the dividend warrants, even if lost or stolen, cannot be used for anypurpose other than for depositing the money in the accounts specified on the dividend warrants and ensures safety forthe investors. However, members who wish to receive dividend in an account other than the one specified while openingthe Depository Account, may notify their DPs about any change in the Bank Account details.

Plant Locations:

The Company has the following manufacturing and operating Divisions :

Textile Division :

Thane Jekegram, Thane – 400 606, Maharashtra;

Jalgaon No. E/1, MIDC Area, Phase II, Ajanta Road, Jalgaon – 425 003, Maharashtra;

Chhindwara B 1, A.K.V.N., Boregaon Industrial Growth Centre, Kailash Nagar, Tehsil Sauser, Dist. Chhindwara,Madhya Pradesh, Pin – 480 001;

Vapi N. H. No.8, Khadki - Udwada, Taluka Pardi, District Valsad, Pin – 396 185, Gujarat.

J. K. Files and Tools Division:

Ratnagiri A-1 Mirjole Industrial Estate, MIDC, Kolhapur Road, Ratnagiri – 415 639, Maharashtra;

Chiplun Plot No. C 1/1, MIDC Area, Gane – Khadpoli, Chiplun – 415 605, Maharashtra;

Pithampur Shed No. S/1 & S/2, Sector 1, Road No. 10, Pithampur – 454 775, Dist. Indore, Madhya Pradesh;

Kolkata 22 New Tangra Road, Kolkata – 700 046, West Bengal;

Aviation Division : Mahindra Towers, B Wing, 2nd floor, P. B. Marg, Worli, Mumbai – 400 018.

Address for Correspondence:

PHYSICAL SHARES DEMAT SHARES DEBENTURES AND FIXED DEPOSITS

INTIME SPECTRUM REGISTRY LIMITED Respective Depository Raymond LimitedC-13, Pannalal Silk Mills Compound, Participants of the shareholders Share DepartmentL.B.S Marg, Bhandup (West), Pokhran Road No.1Mumbai – 400 078 JekegramTel : 022-25963838 Thane 400 606Fax : 022-25946969 Maharashtrae-mail: Phone : 4036 8619mahadevan.iyer@intimespectrum.com Fax : 2538 2912mangesh.gomane@intimespectrum.com

SECRETARIAL AUDIT FOR RECONCILIATION OF CAPITAL:

As stipulated by SEBI, a qualified Practising Company Secretary carries out Secretarial Audit to reconcile the total admittedcapital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and thetotal issued and listed capital. This audit is carried out every quarter and the report thereon is submitted to the Listed StockExchanges. The audit confirms that the total Listed and Paid-up Capital is in agreement with the aggregate of the totalnumber of shares in dematerialised form (held with NSDL and CDSL) and total number of shares in physical form.

24

TEN YEAR HIGHLIGHTS

(Rupees in Lacs)

2006-07 * 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-2000 1998-99 1997-98

INCOME

Sales and Other Income 137497 140637 122639 116853 109588 103208 147279 167630 160084 154601

% Increase/(Decrease) (2.2) 14.7 4.9 6.6 6.2 (29.9) (12.1) 4.7 3.5 24.7

Gross Profit before interestand depreciation 34840 27170 18442 27305 21820 18844 52570 23115 30292 23966

As % of Sales andOther Income 25.3 19.3 15.0 23.4 19.9 18.3 35.7 13.8 18.9 15.5

Net Profit after Tax 20125 12229 7682 13184 9143 8364 33341 3262 8659 4803

ASSETS EMPLOYED

Net Fixed Assets 76174 84512 57563 42122 40602 37857 37079 85373 93504 92755

Investments 98448 73660 73428 71587 61231 58766 60744 18583 9683 11275

Net Current Assets 45343 44013 42083 44381 46623 50263 42009 53072 65691 62542

Total 219965 202185 173074 158090 148456 146886 139832 157028 168878 166572

% Increase/(Decrease) 9 17 9 6 1 5 (11) (7) 1 13

EQUITY FUNDS ANDEARNINGS

Shareholders’ Funds:

Shareholders’ Investments 1885 1885 1885 1885 1885 1885 1885 3256 3256 3256

Bonus Shares 4253 4253 4253 4253 4253 4253 4253 4253 4253 4253

Reserves 129478 112857 104256 98717 89297 83388 81252 73307 71386 64976

Total 135616 118995 110394 104855 95435 89526 87390 80816 78895 72485

Contribution toCountry’s Exchequer 10306 11011 10031 17672 17096 17410 27062 31204 30619 30219

Per Equity Share of Rs.10: (Rupees)

Book Value 220.9 193.9 179.9 170.8 155.5 145.9 142.4 107.6 105.1 96.5

Earnings 32.9 19.7 13.6 21.6 14.7 14.4 35.6 4.3 11.5 6.4

Dividend 5.0 5.0 4.0 5.5 4.5 4.5 3.0 1.5 2.0 1.5

* Figures are stated as per the Annual Report of 2005-06

25

REPORT OF THE AUDITOR TO THE MEMBERSWe have audited the attached Balance Sheet of RAYMOND LIMITED as at 31st March, 2007 and the annexed Profit and LossAccount for the year ended on that date, and also the Cash Flow Statement for the year ended on that date. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free fromany material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes, assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall presentation of the financial statements. We believe that ouraudit 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 astatement 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 necessaryfor 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 fromour 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 withthe 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 complywith 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, 2007 and taken on record by the Board ofDirectors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March,2007, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section274 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 financialstatements, read together with Note No.3 in Schedule 16 – relating to investments in, loans and other receivables fromsubsidiaries / joint ventures, whose networths have eroded / substantially eroded and read together with other notesthereon, give the information required by the Companies Act, 1956, in the manner so required and present a true andfair 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, 2007;

(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 ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Mumbai: 27th April, 2007 Membership No.33596

26

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITOR’S REPORT OF EVENDATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2007 OFRAYMOND LIMITEDOn the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, westate that:-i. (a) The Company has generally maintained proper records showing particulars, including quantitative details and

situation of fixed assets;

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals, in aphased verification programme, which, in our opinion, is reasonable, looking to the size of the Company and thenature of its business. According to the information and explanations given to us, discrepancies noticed on physicalverification have been properly dealt with in the books of account;

(c) According to the information and explanations given to us, although the Company’s Denim Division was hived offduring the year into a Joint Venture Company, the going concern status of the Company continues to remainunaffected;

ii. (a) As explained to us, inventories have been physically verified during the year by the management. Inventories lyingwith outside parties have been confirmed by them at the close of the year;

(b) The procedures explained to us, which are followed by the management for physical verification of inventories, are,in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the Companyis maintaining proper records of its inventory. Discrepancies which were noticed on physical verification of inventory ascompared to book records, have been properly dealt with in the books of account;

iii. (a) According to the information and explanations given to us, the Company has not granted any loan, securedor unsecured, to companies, firms or other parties covered in the register maintained under Section 301ofthe Companies Act 1956;

(b) According to the information and explanations given to us, the Company has not taken any loan, secured orunsecured, from companies, firms or other parties covered in the register maintained under Section 301 of theCompanies Act 1956;

iv. In our opinion and according to the information and explanations given to us, there are generally adequate internalcontrol procedures commensurate with the size of the Company and the nature of its business with regard to purchaseof inventory and fixed assets and for sale of goods and services. Further, the Company is implementing an ERP Solutionin phases and the controls under the said solution are being deployed. During the course of our audit, we have notobserved any continuing failure to correct major weaknesses in internal control;

v. On the basis of the audit procedures performed by us, and according to the information, explanations and representationsgiven to us, we have not come across any transaction in which directors were interested, as contemplated underSection 297 and Section 299 of the Companies Act, 1956, and which were required to be entered in the register maintainedunder Section 301 of the said Act;

vi. The Company has not accepted any deposits from the public;

vii. On the basis of internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of internal auditfunctions carried out by a firm of Chartered Accountants appointed by the management, is commensurate with thesize of the Company and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by theCentral Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect ofthe Company’s products to which the said rules are made applicable, and are of the opinion that, prima-facie, theprescribed accounts and records have been made and maintained. We have, however not made a detailed examinationof the records with a view to determine whether they are accurate;

ix. (a) According to the records of the Company, it has generally been regular in depositing undisputed statutory duesincluding Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, SalesTax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities;

(b) On the basis of our examination of the documents and records, and explanations and information given to us, thefollowing disputed statutory dues on account of Sales Tax, Excise Duty, Entry Tax and Cess on Royalty whichhave not been deposited with the appropriate authorities are as under:

27

Nature of Dues Amount (Rs. in lacs) Forum where dispute is pending

Sales Tax 35.13 High Courts

18.76 Sales Tax Appellate Tribunal

476.14 Sales Tax Departmental Authorities

Excise Duty 2600.20 High Courts

2853.67 Central Excise and Service Tax Appellate Tribunal

81.69 Excise Departmental Authorities

Service Tax 1.18 Central Excise and Service Tax Appellate Tribunal

Entry Tax 33.08 Sales Tax Departmental Authorities

2.14 High Court

Cess on Royalty Amount not determinable

x. The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses, both, in thefinancial year under report and the immediately preceding financial year;

xi. On the basis of the records examined by us and the information and explanations given to us, the Company has notdefaulted in repayment of dues to Banks and Debenture holders. There were no dues to any Financial Institution duringthe year;

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge ofshares, debentures or any other securities;

xiii. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records havebeen maintained in respect of the transactions and contracts and timely entries have been made therein. All theinvestments are held by the Company in its own name;

xiv. According to the information and explanations given to us, and the representations made by the management, theCompany has given guarantee for loans taken by its subsidiaries from Banks aggregating Rs.10986 lacs. However, theterms and conditions of such guarantees are, not prima-facie prejudicial to the interests of the Company;

xv. On the basis of the records examined by us, we have to state that, the Company, has prima facie, applied the term loansfor the purposes for which they were obtained.

xvi. According to the information and explanations given to us and on an overall examination of the Financial Statements ofthe Company, we are of the opinion that, prima facie short term funds have not been used for long term purposes;

xvii. The Company has not made any preferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Companies Act, 1956;

xviii. On the basis of the records and documents examined by us, the Company has, during the year, issued short term privatelyplaced secured debentures with daily put/call option, aggregating Rs.264000 lacs, out of which, debentures aggregatingRs.258200 lacs have been repaid prior to the creation of any security in favour of the debenture holders. Debenturesaggregating Rs.5800 lacs were outstanding at the close of the year which have also since been repaid, prior to creationof any security in favour of the debentures holders;

xix. The Company has not raised any money by public issue, during the year;

xx. According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or bythe Company, has been noticed or reported by the Company during the year ;

Looking to the nature of activities being carried on, at present, by the Company and also considering the nature of the mattersreferred to in the various clauses of the Companies (Auditors’ Report) Order, 2003, and the Companies (Auditor’s Report)(Amendment) Order, 2004, Clauses (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g), (v)(b) and (xiii) of paragraph 4 of the aforesaid Order, are,in our opinion, not applicable to the Company.

For and on behalf ofDALAL & SHAH

Chartered Accountants

Ashish DalalPartner

Mumbai: 27th April, 2007 Membership No.33596

28

BALANCE SHEET AS AT 31ST MARCH, 2007

Schedule 31st March, 2007 31st March, 2006No. (Rs. in lacs) (Rs. in lacs)

SOURCES OF FUNDS:Shareholders’ Funds:

Share Capital 1 6138.08 6138.08Reserves and Surplus 2 129477.86 112856.45

135615.94 118994.53Loan Funds: 3

Secured Loans 56686.05 54667.56Unsecured Loans 22074.96 22120.28

78761.01 76787.84Deferred Tax Liability (Net)

(Refer Note18 ) 5587.73 6402.73

TOTAL 219964.68 202185.10

APPLICATION OF FUNDS:Fixed Assets: 4

Gross Block 123003.48 136672.80Less: Depreciation and Amortisation 55397.84 67765.80

Net Block 67605.64 68907.00Capital work-in-progress 8568.51 15604.81

76174.15 84511.81

Investments 5 98447.50 73660.28

Current Assets, Loans and Advances: 6Inventories 28366.36 31904.16Sundry Debtors 26877.07 24846.74Cash and Bank Balances 2561.40 2503.17Other Current Assets 2969.90 3315.06Loans and Advances 21715.86 14442.06

82490.59 77011.19

Less:Current Liabilities and Provisions: 7

Current Liabilities 29083.90 26227.34Provisions 8063.66 6770.84

37147.56 32998.18

Net Current Assets 45343.03 44013.01

TOTAL 219964.68 202185.10

Notes forming part of the Accounts 16

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

}

29

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007Year ended Year ended

Schedule 31st March, 2007 31st March, 2006No. (Rs. in lacs) (Rs. in lacs)

INCOMESales, Services and Export Incentives 8 129962.75 134459.99Less: Excise Duties (1543.40) (1986.08)

128419.35 132473.91Other Income 9 9077.82 8163.51

137497.17 140637.42EXPENDITURE

Material Costs 10 37737.82 40665.75Manufacturing and Operating Costs 11 27099.12 29344.92(Increase)/Decrease in finished and process stock 12 791.45 (510.89)Employment Costs 13 22558.39 20397.96Administrative, Selling and General expenses 14 26113.63 23833.84Finance Charges 15 4711.91 3528.09Depreciation and Amortisation 6305.51 7271.16

125317.83 124530.83Less: Trial Run Expenditure capitalised (51.04) (70.75)

Finished and process stock transferred ondivestment of Business (3468.26) (1187.81)

121798.53 123272.27PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS:

- Continuing operations 15172.47 16449.92- Divested Denim business 526.17 915.23

15698.64 17365.15Add/(Less): EXCEPTIONAL ITEMS (Refer Note 17)

- Surplus on divestment of Denim business (Refer Note 7) 8809.32 —- Others (684.68) (994.67)

PROFIT FOR THE YEAR BEFORE TAX 23823.28 16370.48Provision for Income Tax *:— Current Tax 4210.00 2750.00— Deferred Tax (815.00) 1000.38— Fringe Benefit Tax 275.00 358.00Provision for Wealth Tax 28.00 33.00*Includes Rs.188.65 lacs (Previous Year Rs.77.45 lacs) on ordinary activities of Denim Business

PROFIT FOR THE YEAR AFTER TAX 20125.28 12229.10Add/(Less): Prior period adjustments (net) (Refer Note 16) 88.05 (110.63)Excess/(Short) provision for tax in respect of earlier years (1.30) (18.00)Balance brought forward 16717.36 10601.41

BALANCE AVAILABLE FOR APPROPRIATION 36929.39 22701.88APPROPRIATION:

Debenture Redemption Reserve 1450.00 1275.00General Reserve 4000.00 1210.05Proposed Dividend 3069.04 3069.04Tax on proposed dividend 521.58 430.43

9040.62 5984.52Balance carried to Balance Sheet 27888.77 16717.36Weighted average number of Equity Shares outstanding

during the year 61380853 61380853Basic and diluted earnings per share, including

exceptional items (in Rs.) 32.93 19.71Basic and diluted earnings per share, excluding

exceptional items (net of tax) (in Rs.) 17.51 20.56Notes forming part of the Accounts 16

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

}

30

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2007

Year Ended Year Ended 31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)A. Cash Flow arising from Operating Activities:

Net Profit before Tax and Exceptional Items as perProfit and Loss Account 15698.64 17365.15Add/(Deduct):a) Provision for Doubtful Debts / Bad Debts, Advances and

claims written off 46.20 345.48b) Provision no longer required - (193.09)c) Provision for Diminution in value of Investments 140.28 -d) Depreciation and Amortisation Charge 6305.51 7271.16e) Finance Charges and Gain/Loss on variation in Foreign

Exchange rates 3757.36 3551.05f) Interest Income (1717.91) (1216.44)g) Dividend Income (1199.02) (1552.69)h) Surplus on sale of Investments (3645.91) (3915.91)i) Surplus on sale of Assets 409.04 (107.91)

4095.55 4181.65Operating Cash Profit before Working Capital Changes 19794.19 21546.80Add/(Deduct):a) Increase/(Decrease) in Trade Payable 6463.06 6679.38b) Decrease/ (Increase) in Trade and Other Receivables (11896.73) (4326.73)c) Decrease/(Increase) in Inventories (4325.37) (4502.36)

(9759.04) (2149.71)Cash Inflow from Operations 10035.15 19397.09Deduct:Direct Taxes paid 3720.82 2643.48Cash Inflow before Prior Period Adjustments 6314.33 16753.61Add/(Deduct) : Prior Period adjustments 88.05 (109.24)Net Cash Inflow in the course of Operating Activities 6402.38 16644.37Deduct: Voluntary Retirement Compensation 684.68 888.31Net Cash Inflow in the course of Operating Activities afterExceptional Items 5717.70 15756.06

B. Cash Flow arising from Investing Activities:Inflow:a) Sale of Fixed Assets 44.08 420.35b) Proceeds from divestment of business (Net) 31311.13 2568.34c) Interest Received 2212.93 195.68d) Dividend Received 1195.02 1552.69e) Sale of Current Investments (Net) 23118.75 20813.50

57881.91 25550.56Outflow:a) Acquisition of Fixed Assets 28257.20 33063.04b) Investment in Subsidiaries/Joint Ventures 27428.85 9217.24c) Purchase of other Long Term Investments 16971.49 8970.00d) Increase in Loans to Companies (Net) 4646.10 3035.77

77303.64 54286.05Net Cash (Outflow) in the course of Investing Activities (19421.73) (28735.49)

C. Cash Flow arising from Financing Activities:Inflow:a) Proceeds from Term Loans 14185.44 20038.97b) Proceeds from other Borrowings (Net) 10808.69 2474.96c) Proceeds from Debentures (Net) 700.00 100.00

25694.13 22613.93Outflow:a) Repayment of Term Loans 2182.96 2039.48b) Finance Charges (Net) 6262.59 3650.16c) Dividend Paid 3055.89 2445.65d) Tax on dividend 430.43 320.87

11931.87 8456.16Net Cash Inflow in the course of Financing Activities 13762.26 14157.77

Net Increase/(Decrease) in Cash/Cash Equivalents (A+B+C) 58.23 1178.34Add: Balance at the beginning of the year 2503.17 1324.83Cash/Cash Equivalents at the close of the year 2561.40 2503.17

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

}

31

SCHEDULES ‘1’ TO ‘16’ ANNEXED TO AND FORMING PART OF THE BALANCE SHEET AS AT AND THEPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007.

31st March, 2007 31st March, 2006(Rs. in lacs) (Rs. in lacs)

SCHEDULE 1 - SHARE CAPITAL

Authorised:

10,00,00,000 Equity Shares of Rs.10 each 10000.00 10000.00

10000.00 10000.00

Issued and Subscribed :

*6,13,80,853 Equity Shares of Rs.10 each, fully paid-up 6138.08 6138.08

Per Balance Sheet 6138.08 6138.08

3,50,000 Equity Shares were allotted as fully paid-up pursuantto contracts without payments being received in cash and4,25,28,312 Equity Shares were allotted as fully paid-up BonusShares by way of capitalisation of Securities PremiumAccount and Reserves.

*includes 11,01,662 Equity Shares represented by GlobalDepository Receipts.

SCHEDULE 2 - RESERVES AND SURPLUS

(a) Securities Premium Account:Balance as per last account 14778.55 14778.55

(b) Capital Redemption Reserve:Balance as per last account 1371.01 1371.01

(c) Debenture Redemption Reserve:Balance as per last account 1275.00 750.00Add: Transfer from Profit and Loss Account 1450.00 1275.00

2725.00 2025.00Less: Transfer to General Reserve 1275.00 750.00

1450.00 1275.00

(d) General Reserve:Balance as per last account 78714.53 76754.48Add: 1) Transfer from Debenture Redemption Reserve 1275.00 750.00

2) Transfer from Profit and Loss Account 4000.00 1210.05

83989.53 78714.53

(e) Profit and Loss Account 27888.77 16717.36

Total Reserves and Surplus - Per Balance Sheet 129477.86 112856.45

32

31st March, 2007 31st March, 2006(Rs. in lacs) (Rs. in lacs)

SCHEDULE 3 - LOAN FUNDS(a) Secured Loans:

Debentures:58 Privately Placed Non-Convertible Debentures ofRs.1,00,00,000 each with daily put/call option(interest linked with MIBOR) (Previous Year 51 PrivatelyPlaced Non-Convertible Debentures ofRs.1,00,00,000 each) [Refer Note 1(a)] 5800.00 5100.00Term Loans from Banks [Refer Note 1(b)] 31914.80 39875.27Interest accrued thereon 38.20 —

31953.00 39875.27Working Capital Loans from Banks (including foreigncurrency loan from banks Rs.1.05 lacs; Previous yearRs. 1787.40 lacs) [Refer Note 1(c)] 18923.15 9692.29Interest accrued thereon 9.90 —

18933.05 9692.29

Total - Secured Loans 56686.05 54667.56(b) Unsecured Loans:

Foreign Currency Loans from Banks 21566.44 21338.13Short Term Borrowings :Under Buyer’s Credit Arrangements — 140.11Sales Tax Deferment Loan 508.52 642.04

Total - Unsecured Loans 22074.96 22120.28

Total Loan Funds - Per Balance Sheet 78761.01 76787.84

SCHEDULE 4 - FIXED ASSETS(Refer Note 2) (Rs. in lacs)

GROSS BLOCK - AT COST DEPRECIATION / AMORTISATION NET BLOCK(unless otherwise specified)

Balance Additions/ Deduct- Balance Upto For the Deduct- Upto As at As atas at Adjust- ions/Ad- as at 31.3.2006 year ions/Ad- 31.3.2007 31.3.2007 31.3.2006

1.4.2006 ments justments 31.3.2007 justments

A. AssetsLand -

Freehold 2179.12 341.02 — 2520.14 — — — — 2520.14 2179.12

Leasehold 392.71 — 146.46 246.25 25.76 3.00 10.94 17.82 228.43 366.95

Buildings 16639.07 5246.88 5907.14 15978.81 4915.30 500.01 979.16 4436.15 11542.66 11723.77

Plant and Machinery,Electrical Installationsand Equipments 106908.96 20381.93 40388.64 86902.25 57444.20 4699.96 16355.09 45789.07 41113.18 49464.76

Furniture, Fixtures andOffice Equipment 3784.33 579.63 652.81 3711.15 2824.57 241.61 566.67 2499.51 1211.64 959.76

Livestock (at book value) 16.19 — 0.41 15.78 — — — — 15.78 16.19

Vehicles 1970.38 306.66 291.57 1985.47 1127.53 240.09 192.02 1175.60 809.87 842.85

Aircraft 3921.41 8644.08 2712.49 9853.00 915.04 438.68 569.59 784.13 9068.87 3006.37

Boats and WaterEquipments 537.04 — — 537.04 266.75 53.55 — 320.30 216.74 270.29

Software 323.59 930.00 — 1253.59 246.65 128.61 — 375.26 878.33 76.94

Per Balance Sheet 136672.80 36430.20 50099.52 123003.48 67765.80 $6305.51 @18673.47 55397.84 67605.64 68907.00

Previous year’s Total 114068.96 25529.89 2926.05 136672.80 62798.10 $7280.01 @2312.31 67765.80 68907.00

@ Net after adjustments on account of Short/(Excess) provision for depreciation/amortisation (Rs.9.93 lacs) relating to earlieryears (Previous year Rs.1.39 lacs).

$ Includes depreciation capitalised Rs. Nil (Previous Year Rs. 8.85 lacs)B. Capital work-in-progress 8568.51 15604.81

33

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE)(fully paid up unless otherwise specified)

I. LONG TERM INVESTMENTSA. Investments in Government Securities: 0.06 —

National Saving Certificates (deposited withGovernment Department as Security)

0.06 —

B Investments in Shares of Subsidiary Companies(Unquoted):1. Raymond Apparel Limited

- Equity Shares of Rs.10 each 20,00,000 191.51 20,00,000 191.51- 6% Cumulative Redeemable Preference Shares of Rs.100 each 34,30,000 3430.00 34,30,000 3430.00

2. J.K. (England) Limited (Equity Shares of £.1 each) 1,000 0.03 1,000 0.033. Jaykayorg AG (Equity Shares of Swiss Francs 100 each) 500 0.98 500 0.984. Pashmina Holdings Limited (Equity Shares of Rs.10 each) 7,40,000 724.00 7,40,000 724.005. Everblue Apparel Limited [ Refer Note 3(c)]

- Equity Shares of Rs.10 each 50,00,000 500.00 50,00,000 500.00- 6%Cumulative Optionally Convertible Preference Shares of

Rs.100 each 10,00,000 1000.00 10,00,000 1000.006. Regency Texteis Portuguesa, Limitada:

- Equity Shares 1148.91 1148.91- Preference Shares 355.24 355.24

7. Hindustan Files Limited (Equity Shares of Rs.10 each) 37,70,070 377.01 37,70,070 377.018. Colorplus Fashions Limited

- Non Cumulative Preference Shares of Rs.100 each 3,98,000 398.00 3,98,000 398.009. Silver Spark Apparel Limited: [Refer Note 3(b)]

- Equity Shares of Rs.10 each 70,00,000 700.00 70,00,000 700.00- 7% Non Cumulative Preference Shares of Rs.100 each 10,00,000 1000.00 5,00,000 500.00

10. Celebrations Apparel Limited (Equity Shares of Rs.10 each)[Refer Note 3(a)] 27,10,000 271.00 27,10,000 271.00

11. Scissors Engineering Products Limited- Equity Shares of Rs.10 each 6,764,500 676.45 66,08,500 660.85- 6% Cumulative optionally Convertible Preference Shares of

Rs.100 each 2,018,950 2018.95 19,82,550 1982.5512. JK Talabot Limited (Equity Shares of Rs.10 each ) 7,248,936 724.89 48,18,149 481.8113. Raymond Europe SRL * 41.58 —

13558.55 12721.89

* A Subsidiary from 1st January,2007C. Investments in Joint Ventures

1. Raymond Zambaiti Private Limited (Equity Shares of Rs.10 each) 4,10,00,000 4100.00 4,10,00,000 4100.002. Raymond Fedora Private Limited (Equity Shares of Rs.10 each)

[Refer Note 3(d)] 96,90,000 969.00 96,90,000 727.003. Raymond UCO Denim Private Limited

- Equity Shares of Rs.10 each 10,000,000 14800.19 — —- 0.1% Preference Shares of Rs.10 each 10,000,000 8700.00 — —

28569.19 4827.00

D. Non-Trade Investments:Shares (Unquoted):1. Gujarat Sheep & Wool Development Corporation Limited

(Equity Shares of Rs.100 each) 102 0.10 102 0.10Less: Provision for diminution in value of Investments (0.10) (0.10)

2. P.T. Jaykay Files Indonesia - Associate Company(Equity Shares of Indon.Rp.4,150 = US$ 10 each) 24,000 23.99 24,000 23.99

3. Bengal & Assam Investors Limited (Equity Shares of Rs.100 each) 1,150 1.00 1,150 1.00Less: Provision for diminution in value of Investments (1.00) (1.00)

4. Impex (India) Limited (Equity Shares of Rs.10 each) 8,000 0.80 8,000 0.805. R.R. Investments & Estates Private Limited (Equity Shares of Rs.100 each) 225 5.19 225 5.196. Seven Seas Transportation Limited (Equity Shares of Rs.10 each) 2,05,000 27.94 2,05,000 27.94

Less: Provision for diminution in value of Investments (27.94) (27.94)7. J.K. Cotton Spg. & Wvg. Mills Company Limited

(Equity Shares of Rs.10 each) 10,510 2.49 10,510 2.49Less: Provision for diminution in value of Investments (2.49) (2.49)

8. Radha Krshna Films Limited - Associate Company(Equity Shares of Rs.10 each) 25,00,000 250.00 25,00,000 250.00Less: Provision for diminution in value of Investments (250.00) (250.00)

29.98 29.98

34

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

E. Non-Trade Investments:Shares (Quoted):1. J.K. Investo Trade (India) Limited - Associate Company

(Equity Shares of Rs.10 each) 34,89,878 326.12 34,89,878 326.12Bonds (Quoted):1. 6.75% Tax Free US 64 Bonds of Rs.100 each 9,74,956 974.96 9,74,956 974.962. 6.60% UTI Units Tax Free Bonds of Rs.100 each 20,00,000 2000.00 20,00,000 2000.00

3301.08 3301.08F. Non-Trade Investments:

Unquoted Debentures:1. R.R. Investments & Estates Private Limited (Unsecured Debentures

of Rs.10,000 each) [Residual value after redemption Rs.7,800 each(Net of redemption Rs.0.06 lac and proportionate acquisitioncost written off Rs.1.56 lacs)] 19 42.19 19 42.19

2. Plugin Sales Limited (a subsidiary upto 25th March, 2006)(Unsecured Debentures of Rs.100 each) — — 9,94,000 994.00Less: Provision for diminution in value of Investments — — — (994.00)

3. Raymond Apparel Limited (a subsidiary) (Fully ConvertibleUnsecured Debentures of Rs.100 each) 28,50,000 2850.00 — —

2892.19 42.19G. Others:

1 Units of Unit Trust of India 2002 of Rs. 10 each (NAV Previous yearRs.43.06 lacs) (Units merged with UTI Balanced Fund IncomeReinvestment & Transferred to Current Investment) — — 3,20,407.478 19.51

2 5.50% SIDBI Capital Gains Bonds Issue - 2005 of Rs.10000 each 8,200.000 820.00 8,200.000 820.003 5.50% NHAI Capital Gains Bonds Issue - of Rs.100000 each 75000.00 7500.00 — —

8320.00 839.51

H. Investments in Mutual Fund - FMP (Growth)(Units of Rs.10 each)1 Birla Fixed Term Plan Series A - 16 Months -Growth

(Previous year Rs.1073.21 lacs) — — 1,00,00,000.000 1000.002 Tata Fixed Horizon Fund Series 2 B Option (18 Months) Growth

(NAV Rs 541.64 lacs (Previous year Rs.503.99 lacs) 5000000.00 500.00 50,00,000.000 500.003 Tata Fixed Horizon Fund Series 2 Plan C (18 Months) Growth

(NAV Rs 540.31 lacs,Previous year Rs.505.02 lacs) 5000000.00 500.00 50,00,000.000 500.004 ABN AMRO Fixed Term Plan - Series 1 - (Growth) 14 Months

(NAV Rs 542.94 lacs,Previous year Rs.504.25 lacs) 5000000.00 500.00 50,00,000.000 500.005 Tata Fixed Horizon Fund Series 3 Scheme D (13 Months)

Growth (NAV Rs 1085.36 lacs,Previous year Rs.1004.60 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.006 ABN AMRO FTP- Series 2 - 13 Months Plan Growth (NAV Rs 1086.75

lacs,Previous year Rs.1003.97 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.007 Franklin Templeton FIXED TENURE FUND SERIES V 13 MONTHS PLAN

-Growth (NAV Rs 1085.94 lacs,Previous year Rs.1002.91 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.008 Standard Chartered Fixed Maturity 2nd Plan - 13 Months - Growth

(NAV Rs 1087.90 lacs,Previous year Rs.1004.25 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.009 Kotak FMP Series 13 - 13 Months Growth Option (NAV Rs 1086.74

lacs,Previous year Rs.1003.28 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.0010 Tata Fixed Horizon Fund Series 3 Scheme G (13 Months) Growth

(NAV Rs 543.38 lacs, Previous year Rs.500.86 lacs) 5000000.00 500.00 50,00,000.000 500.0011 Prudential ICICI FMP Series 34 Scheme-18 Months Plans

(NAV Rs 1005.70 lacs) 10000000.00 1000.00 — —12 Prudential ICICI FMP Series 34 Scheme-17 Months Plans (NAV

Rs 503.47 lacs) 5000000.00 500.00 — —13 Kotak FMP 16M Series 1 Growth (NAV Rs 1011.11 lacs,) 10000000.00 1000.00 — —14 HDFC FMP 16M Dec2006(2) Wholesale Plan Growth

(NAV Rs 503.73 lacs) 5000000.00 500.00 — —15 Prudential ICICI FMP Series 34 Scheme-16 Months Plans (NAV

Rs 1007.28 lacs) 10000000.00 1000.00 — —16 HSBC Fixed Term Series 22 Inst. Growth (15 Months Plan)

(NAV Rs 1005.43 lacs) 10000000.00 1000.00 — —17 HDFC FMP 16M January2007(2) Wholesale Plan growth (NAV

Rs 1004.27 lacs) 10000000.00 1000.00 — —18 Templeton Fixed Horizon Fund Series I -15 Months Plans-Institutional

Growth (NAV Rs 501.89 lacs) 5000000.00 500.00 — —19 Birla FTP Series-P-Growth (NAV Rs 503.72 lacs) 5000000.00 500.00 — —20 Prudential ICICI FMP Series 34 Scheme-15 Months Plans Institutional

Growth (NAV Rs 503.78 lacs) 5000000.00 500.00 — —21 UTI FIXED Term Income Fund-Series II Plan 16- Institutional Growth

Plan (NAV Rs 1009.02 lacs) 10000000.00 1000.00 — —22 Kotak FMP 13M Series 2 Institutional Growth (NAV Rs 658.25 lacs) 6580000.00 658.00 — —

161580000.00 16158.00 8000.00I. Investments in Venture Capital Fund

1 India Growth Fund (Units of Rs.1000 each, Paid up value perUnit of Rs.500 each, Previous year Rs.300 each) 50,000.000 250.00 50,000.000 150.00

2 HDFC India Real Estate Fund (Units of Rs.1000 each) 2,23,294.000 2232.94 1,00,000.000 1000.00

2482.94 1150.00

Total - Long Term Investments 75311.99 30911.65

35

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

II. CURRENT INVESTMENTSA. Dividend Option (Units of Rs.10 each, unless otherwise specified):

1. Magnum Debt Fund Series - 180 Days D (November 2005)(NAV Previous year Rs.501.06 Lacs) — — 50,00,000.000 500.00

2. Reliance Fixed Maturity Fund Quarterly Plan III - Series II(NAV Previous year Rs.2611.62 lacs) — — 2,60,93,244.619 2609.32

3. Grindlays Fixed Maturity - 21 st Plan Dividend (NAV Previous yearRs.1123.65 lacs) — — 1,12,36,530.331 1123.65

4. Kotak FMP Series XVI - Dividend (NAV Previous year Rs.2020.09 lacs) — — 2,01,85,162.967 2018.525. Kotak FMP Series XVII - Dividend (NAV Previous yearRs.1008.89 lacs) — — 1,00,80,082.382 1008.016. Tata Fixed Horizon Fund Series 3 - Scheme A (6 Months) Dividend

(NAV Previous year Rs.1513.21 lacs) — — 1,50,98,388.643 1509.867. UTI Fixed Maturity Plan (Q F M P / 0106/11) Dividend Plan (NAV

Previous yearRs.504.39 lacs) — — 50,36,519.689 503.668. ABN AMRO Fixed Term Plan Series 2 Regular Dividend (NAV Previous

year Rs.502.80 lacs) — — 50,24,693.827 502.479. Kotak Lifestyle -Dividend (NAV Rs.564.44,Previous year Rs.499.45 lacs) 4850000.00 485.00 48,50,000.000 485.0010. Reliance Liquidity Fund - Daily Dividend Reinvestment option

(Previous year Rs.5955.88 lacs) — — 5,95,40,294.301 5955.8811 Birla Cash Plus -Instl. Prem. Daily Dividend Reinvestment Option

(NAV Rs.42.43 lacs) 423451.68 42.43 — —12 TATA Liquid Super High Investment Fund Daily Dividend

(NAV Rs.2568.32 lacs) 230441.45 2568.32 — —13 Kotak Liquid (Institutional Premium)-Daily Dividend (NAV Rs.2.05 lacs) 16769.39 2.05 — —14 JM Money Manager Fund Super Plus Plan-Daily Dividend (171)

(NAV Rs.2551.71) 25517075.95 2551.71 — —15 HDFC Cash Management Fund-Saving Plan-Daily Dividend

Reinvestment (NAV Rs.7.42 lacs) 69730.09 7.42 — —16 HDFC Cash Management Fund-Call Plan-Daily Dividend

Reinvestment -Option (NAV Rs.2002.01 lacs) 19201029.93 2002.01 — —17 DBS Chola Treasury Management Fund-Daily Dividend

(NAV Rs.1001.90 lacs) 10013411.80 1001.34 — —18 Kotak FMP 3M Series 13- Dividend (Weekly) (NAV Rs.400.28 lacs) 4000000.00 400.00 — —19 UTI Balanced Fund (Income - Reinvestment) (NAV Rs.41.39 lacs) 221671.579 22.99 — —

9083.27 16216.36

B. Growth Option (Units of Rs.10 each, unless otherwise specified):1. Kotak Liquid (Institutional) (NAV Rs.906.70 lacs; Previous year

Rs.2677.44 lacs) 6,032,670.076 886.52 1,90,42,673.381 2623.852. Templeton India Treasury Management Account Regular

(NAV Previous year Rs.543.48 lacs) (Units of Rs.1,000 each) — — 31,180.630 537.763. Kotak Liquid (Institutional) - Growth (NAV Rs12.32. lacs;

Previous year Rs.449.03 lacs) 81,998.183 11.93 31,93,658.373 446.264. DSP Merrill Lynch Liquid Plus - Growth (NAV Rs343.57 lacs)

(Units of Rs.1000 each) 32,801.770 337.22 — —

1235.67 3607.87

C. Fixed Maturity Plan (Units of Rs.10 each, unless otherwise specified):1. UTI - Fixed Maturity Plan - YFMP 03/2005 Growth Plan

(NAV Previous year Rs.1064.40 lacs) — — 1,00,00,000.000 1000.002. G104 Grindlays Fixed Maturity - 4th Plan-B - Growth (NAV Previous

year Rs.1588.62 lacs) — — 1,50,00,000.000 1500.003. P142GD Prudential ICICI Plan-1 Year Plus - Growth (Direct)

FMP Plan - Growth (NAV Previous year Rs.1058.51 lacs) — — 1,00,00,000.000 1000.004. Principal Deposit Fund (FMP-6) 371 Days Plan March, 2005 -

Growth (NAV Previous year Rs.1061.30 lacs) — — 1,00,00,000.000 1000.005. Deutsche Fixed Term Fund - Growth Option (NAV Previous year

Rs.1059.64 lacs) — — 1,00,00,000.000 1000.006. Birla Fixed Term Plan Series-C - Growth (NAV Previous year

Rs.1062.12 lacs) — — 1,00,00,000.000 1000.007. Kotak FMP Series-I - Growth (NAV Previous year Rs.1060.48 lacs) — — 1,00,00,000.000 1000.008. Deutsche Fixed Term Fund - Series 2 - Growth Option (NAV Previous

year Rs.1041.90 lacs) — — 1,00,00,000.000 1000.009. Deutsche Fixed Term Fund - Series 3 - Growth Option (NAV Previous

year Rs.821.78 lacs) — — 80,00,000.000 800.0010. Reliance Fixed Term Fund - Series II - Annual Plan III Growth

(NAV Previous year Rs 1032.97 lacs) — — 1,00,00,000.000 1000.00

C/F — 10300.00

36

11. UTI Fixed Maturity Plan(Y.F.M.P/09/05) Growth Plan (NAV Previousyear Rs.2574.70 lacs) — — 2,50,00,000.000 2500.00

12. DSP Merrill Lynch Fixed Term Plan Series III - Yearly Growth(Previous year Rs 509.24 lacs) — — 50,00,000.000 500.00

13. JM Fixed Maturity Fund - Series II - Yearly Plan - YSA - GrowthOption (NAV Rs 1086.98 lacs,Previous year Rs 1001.84 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.00

14. HSBC Fixed Term Series IV - FMP (370 days) Growth Option(NAV Rs 1087.40 lacs,Previous year Rs 1004.24 lacs) 10000000.00 1000.00 1,00,00,000.000 1000.00

15. Chola FMP - Series 1 (Annual Plan) Cumulative - Growth(Previous year Rs 509.23 lacs) — — 50,00,000.000 500.00

16. Reliance Fixed Horizon Fund II-Annual Plan - Series V-InstitutionalGrowth Plan (NAV Rs 1005.03 lacs) 10000000.00 1000.00 — —

17. Principal Pnb Fixed Maturity Plan- Series IV (FMP-37)385 DaysInstitutional Growth Plan. (NAV Rs 1000.64 lacs) 10000000.00 1000.00 — —

18. Reliance Fixed Horizon Fund III-Annual Plan - Series I - InstitutionalGrowth Plan (NAV Rs 2004.48 lacs) 20000000.00 2000.00 — —

19. DBS Chola FMP - Series 6 (371 Days Plan)-Cumulative -(NAV Rs 1000.00 lacs) 10000000.00 1000.00 — —

7000.00 15800.00

D. Equity Shares (Quoted)(Shares of Rs.10 each, unless otherwise specified):1. Dr. Reddy’s Laboratories Limited (Equity Shares of Rs.5 each) # 13,000 90.08 4,000 57.072. Oil & Natural Gas Corporation Limited ## 21,000 105.92 9,500 58.463. Ranbaxy Laboratories Limited (Equity Shares of Rs.5 each) — — 9,800 48.914. ITC Limited(Equity Shares of Re.1 each) 50,000 55.48 80,000 74.455. Tata Motors Limited 17,000 94.43 18,000 91.616. Ashok Leyland Limited (Equity Shares of Re.1 each) — — 1,00,000 20.907. Satyam Computer Services Limited (Equity Shares of Rs.2 each) # 39,000 142.71 4,000 17.888. ICICI Bank Limited 24,500 135.76 40,000 210.009. Bharat Earth Movers Limited 21,914 212.42 — —10. State Bank of India 14,000 62.67 21,500 96.2511. Tata Steel Limited — — 10,000 36.8212. Associated Cement Company Limited 17,000 44.27 25,000 65.1013. Gujarat Ambuja Cement Limited (Equity Shares of Rs. 2 each) 27,480 20.42 85,000 54.3014. Tata Chemicals Limited — — 35,000 45.7815. Grasim Industries Limited 8,200 121.12 18,200 252.1316. Bharat Heavy Electricals Limited — — 2,000 23.5917. Glaxo Smithkline Pharmaceuticals Limited 3,000 19.86 3,000 19.8618. Mphasis B F L Limited — — 71,000 90.2919. Larsen & Toubro Limited (Equity Shares of Rs.2 each)# 3,000 22.56 7,500 69.4720. Hindalco Industries Limited (Equity Shares of Re. 1 each) — — 30,000 38.5721. Cipla Limited (Equity Shares of Rs.2 each) ### 48,000 52.29 21,000 49.9322. Balrampur Chini Mills Limited (Equity Shares of Re.1 each) — — 1,00,000 81.4923. Biocon Limited (Equity Shares of Rs.5 each) 10,000 47.01 — —24. Bosch Chassis Systems India Limited 10,000 96.64 — —25. Britannia Industries Limited 2,310 29.99 — —26. Indian Hotels Company Limited (Equity Shares of Re.1 each)** 120,000 91.80 10,000 52.5527. Indian Oil Corporation Limited — — 37,000 179.7228. Kirloskar Oil Engines Limited (Equity Shares of Rs. 2 each) — — 15,000 9.6029. Mahindra & Mahindra Limited 20,000 77.72 35,000 82.8630. Maruti Udyog Limited (Equity Shares of Rs.5 each) 21,000 107.03 14,250 48.7431. Monsanto India Limited — — 2,000 36.1132. Pfizer Limited 8,000 58.53 5,000 35.0233. S K F India Limited 40,000 114.40 35,000 92.2134. Tata Power Company Limited — 10,000 45.6535. Videsh Sanchar Nigam Limited 8,000 17.97 8,000 17.9736. HDFC Limited 1,600 12.00 3,200 24.0037. Aarti Drugs Limited (Equity Shares of Rs.5 each) — — 61,513 84.9538. Bharat Electronics Limited — — 5,000 25.5839. Bharat Forge Limited (Equity Shares of Rs.2 each) — 20,000 56.5740. Century Textiles & Industries Limited 8,000 14.08 22,000 38.7341. E-Merck (India) Limited $ 11,707 59.65 20,000 101.9042. Hindustan Zinc Limited — — 6,000 7.5543. Industrial Development Bank of India Limited (Conversion from

IDBI Ltd. in ratio 100 : 142) — — 1,50,000 145.58

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

B/F — 10300

C/F 1906.81 2570.15

37

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

B/F 1906.81 2570.15

C/F 4758.12 6996.39

44. Ingersoll Rand India Limited — — 12,500 38.3445. Kesoram Industries Limited — — 20,000 19.3346. Cholamandalam Investment & Finance Company Limited 100,000 185.65 — —47. Cadila Healthcare Limited (Equity Shares of Rs.5 each) 43,000 142.13 — —48. Novartis India Limited (Equity Shares of Rs.5 each) — — 5,000 31.1049. Natco Pharma Limited — — 90,000 120.0250. Dabur India Limited (Equity Shares of Re.1 each) ## 10,000 9.14 — —51. Praj Industries Limited (Equity Shares of Rs. 2 each) 200,000 516.55 2,35,000 234.6752. Tata Consultancy Services Limited (Equity Shares of Re.1 each) # 16,500 124.99 15,500 211.4753. Television Eighteen (India) Limited — — 20,000 52.3554. Texmaco Limited 13,920 81.48 10,392 59.3455. Bayer Crop Science Limited — — 15,000 28.3556. Castrol India Limited — — 20,000 49.8957. Bharti Tele Ventures Limited 27,000 57.28 47,000 99.7158. Centurion Bank of Punjab Limited (Equity Shares of Re.1 each) — — 7,00,000 128.5259. Financial Technologies Limited (Equity Shares of Rs.2 each) 19,593 231.94 30,000 355.1460. Ramco Systems Limited — — 3 0.0161. Amforge Industries Limited — — 50,000 82.3862. Asian Paints Limited 25,000 162.99 7,375 42.5263. Alfa Laval (India) Limited 20,000 194.61 17,094 174.4364. Bharat Petroleum Corporation Limited — — 6,000 26.4865. Bank of Baroda — — 14,402 33.1266. Bombay Dyeing & Manufacturing Company Limited — — 20,000 90.4067. Clariant Chemicals Limited 10,248 36.02 5,000 17.0568. Crompton Greaves Limited — — 20,000 126.9869. Electrotherm (India) Limited — — 20,000 43.9870. Finolex Cables Limited — — 20,807 47.9371. Aventis Pharma Limited — — 2,500 40.8372. Gokaldas Exports Limited (Equity Shares of Re.5 each)*** 12,864 42.28 7,500 49.3073. Godrej Industries Limited (Equity Shares of Re.1 each) * 100,000 62.82 19,844 74.8074. Glenmark Pharmaceuticals Limited (Equity Shares of Rs.2 each) — — 6,750 21.9175. Hindustan Lever Limited (Equity Shares of Re. 1 each) 10,000 16.83 35,000 55.8776. I. G. Petrochemicals Limited — — 1,49,550 54.9277. Hotel Leela Ventures Limited (Equity Shares of Re.2 each) **** — — 30,000 98.9378. INDOCO Remedies Limited — — 16,332 51.4779. Infosys Technologies Limited (Equity Shares of Rs. 5 each)# 5,000 71.02 5,600 140.7980. I - Flex Solutions Limited (Equity Shares of Rs. 5 each) — — 15,000 153.2681. Jindal Saw Limited 25,000 113.40 20,000 92.7982. Jyoti Structures Limited — — 10,000 24.2283. LKP Merchant Financing Limited — — 30,000 19.9684. National Thermal Power Corporation Limited 50,000 50.27 1,15,000 115.6385. NIIT Technologies Limited — — 50,000 90.2486. Punjab National Bank 26,000 124.76 22,500 103.3787. Reliance Industries Limited 24,000 225.87 5,000 20.8888. Reliance Capital Ventures Limited — — 5,000 0.5289. Reliance Communication Limited (Equity Shares of Rs.5 each)

(Formerly Reliance Communication Ventures Ltd) 35,000 111.76 40,000 117.8690. Reliance Energy Ventures Limited — — 5,000 2.9391. Reliance Energy Limited — — 25,000 157.1892. Reliance Natural Resources Limited (Equity Shares of Rs.5 each) — — 5,000 0.2893. Rolta India Limited — — 10,000 25.0694. Shringar Cinemas Limited 145,914 92.29 75,000 53.7895. Tata Teleservices (Maharashtra) Limited — — 3,00,000 87.0996. Tulip IT Services Limited — — 50,000 102.1597. Sundaram Finance Limited (Equity Shares of Rs.5 each) 30,000 118.89 17,487 70.8598. Mount Everest Mineral Water Limited — — 40,000 25.2399. Divis Laboratories Limited 1,750 53.20 2,000 36.11100. Bata India Limited — — 50,000 97.96101. Allahabad Bank — — 2,25,000 202.34102. Syngenta India Limited (Equity Shares of Rs. 5 each) — — 10,000 43.23103. Steel Authority of India Limited 25,000 25.14 1,00,000 62.99

38

31st March, 2007 31st March, 2006Nos. (Rs. in lacs) Nos. (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

B/F 4758.12 6996.39--104. Great Eastern Shipping Company Limited 8,000 14.03 1,20,000 211.54105. Infrastructure Development Finance Company Limited — — 80,000 53.12106. Galaxy Entertainment Corporation limited 25,000 42.73 — —107. Gemini Communications Limited 5,000 22.14 — —108. Great Offshore Limited 2,000 13.36 — —109. GMR Infrastructure Limited 15,000 55.93 — —110. Info Edge (India) Limited 3,000 21.14 — —111. IOL Broadband Limited 6,000 22.76 — —112. India Cements Limited 5,000 10.08 — —113. Lupin Limited 20,000 96.56 — —114. Mahindra Forgings Limited 35,000 16.52 — —115. New Delhi Television Limited (Equity Shares of Rs.4 each) 15,000 37.68 — —116. Punj Lloyd Limited (Equity Shares of Rs.2 each) ****^ 139,875 267.17 — —117. Panacea Biotec Limited (Equity Shares of Re.1 each) 15,000 48.87 — —118. Sun Pharmaceuticals Industries Limited (Equity Shares of Rs.5 each) 16,063 142.15 — —119. Tech Mahindra Limited 2,000 28.09 — —120. U T V Software Communications Limited 24,908 56.61 — —121. Power Finance Corporation Limited 5,189 4.41 — —122. Asahi India Glass Limited (Equity shares of Re.1 each) 35,189 36.15 — —123. Bharat Earth Movers Limited 3,738 46.21 — —124. Bombay Dyeing & Manufacturing Company Limited 4,846 31.84 — —125. BPL Limited 45,285 24.81 — —126. Garware Offshore Services Limited 20,911 22.96 — —127. Gujarat State Petronet Limited 96,238 38.71 — —128. International Travel House Limited 10,596 24.41 — —129. JM Financial Limited 4,470 33.59 — —130. Jindal Drilling and Industries Limited 6,970 37.76 — —131. Haryana Capfin Limited 7,945 13.61 — —132. NIIT Limited 11,100 35.73 — —133. Saregama India Limited 11,002 25.55 — —134. Stone India Limited 14,770 35.46 — —135. Timex Watches Limited (Equity shares of Re.1 each) 75,846 28.35 — —

1880346.00 6093.49 7261.05

23412.44 42885.28

Less: Provision for diminution in value of Current Investments (276.93) (136.65)

Total - Current Investments 23135.51 42748.63

Total - Investments 98447.50 73660.28

Notes: Bonus shares - 2006-07# Bonus shares in ratio of 1:1## Bonus shares in ratio of 1:2### Bonus shares in ratio of 2:3Split Shares* The Shares have been split in FV Rs.6 to Re.1** The Shares have been split in FV Rs.10 to Re.1*** The Shares have been split in FV Rs.10 to Rs.5**** The Shares have been split in FV Rs.10 to Rs.2Shares delivered after 31st March,200797500 Shares of Allahabad Bank delivered after 31st March, 200726646 Shares of Bata India Limited Delivered after 31st March,20077425 Shares of Bombay Dyeing Delivered after 31st March, 200715000 Shares of Colgate Palmolive Delivered after 31st March, 20077592 Shares of Great Offshore Limited Delivered after 31st March, 200750000 Shares of Hotel Leela Delivered after 31st March, 20075117 Shares of Indian Oil Corpn Delivered after 31st March, 200710000 Shares of Reliance Energy Delivered after 31st March, 2007$ 6022 Shares Delivered after 31st March, 2007Shares received after 31st March,2007^ 111900 Shares received after 31st March, 2007Per Balance Sheet 98447.50 73660.28

39

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

Acquired and Sold during the yearNos. Acquisition

Cost(Rs. in lacs)

A. Dividend Option (Units of Rs.10 each, unless otherwise specified):1. Magnum Debt Fund Series- 180 Days D(Nov.05)-Divdend Option 78832.87 7.902. Kotak FMP Series XVI-Dividend 91429.65 9.143. Kotak FMP Series XVII-Dividend 62788.24 6.284. TATA Fixed Horizon Fund Series-3-Scheme A(6 Months) Dividend 111283.67 11.145. UTI Fixed Maturity Plan - (Q F M P /0106/ 11) Dividend Plan 29968.30 3.006. ABN AMRO Fixed Term Plan Series 2 Regular Dividend 54357.64 5.447. DSP Merrill Lynch Liquidity Fund - Institutional - Daily Dividend (Units

of Rs.1000) 221573.13 2216.178. CANLIQUID Fund - Institutional - Daily Dividend Reinvestment 30062203.43 3018.559. Reliance Fixed Horizon fund - Quarterly Plan B -series II -

Dividend Option 26217274.92 2621.7310. HDFC Cash Management Saving-Daily Dividend Reinvestment

Option 217665399.98 23151.7611. ABN AMRO Fixed Term Plan Series 2 Half Yearly Plan A Dividend 10959855.24 1096.1012. TATA Liquid Super High Investment Fund - Daily Dividend

Option (Units of Rs.1000) 361012.77 4023.5613. HDFC FMP 3 M May 2006 (1) - Institutional Plan - Dividend 15529443.05 1552.9414. Kotak FMP Series 24 - Dividend 11442869.71 1144.2915. DBS Chola Liquid Inst.Daily Dividend Reinvestment Plan 40155529.47 4028.1016. TATA Floating Rate Short Term Inst. Plan - Daily Dividend 8018809.56 802.3617. Principal Floating Rate Fund SMP Inst.Option - Dividend

Reinvestment Daily 25570469.09 2557.2318. Prudential ICICI Sweep Cash Option - Daily Dividend 63758870.43 6375.8919. DWS Insta Cash Plus Fund -Institutional Plan - Daily Dividend Option 8505906.52 852.2520. TATA Fixed Horizon Fund - Ser 5-Scheme D - Dividend Reinvestment

(3 month FMP) 5149594.86 514.9621. Kotak Flexi Debt Scheme - Daily Dividend 18454101.07 1851.1522. Principal Pnb Fixed Maturity Plan (FMP-30) 91 days -

Sep06 Dividend payout 5000000.00 500.0023. HDFC Liquid Fund - Premium Plus Plan - dividend 38660477.99 4806.0024. ING Vysya Liquid Fund Institutional - Daily Dividend Option 19005346.41 1902.4925. Standard Chartered Liquidity Manager - Plus - Daily Dividend

(Units of Rs.1000) 907162.27 9072.5326. ABN AMRO FTP Series 3 Quarterly Plan F Dividend 11131069.83 1113.1127. Lotus India Liquid Fund - Institutional Plus Daily Dividend 10198482.82 1019.8528. Reliance Fixed Horizon Fund I -Quarterly Plan - Series II -

Dividend Option 14000000.00 1400.0029. Prudential ICICI FMP Series 32 Three Months Plan-E-Retail-Dividend 15237300.00 1523.7330. UTI Fixed Maturity Plan Quarterly series QFMP/1106/I Dividend

Plan - Reinvestment 12890188.02 1289.0231. Prudential ICICI FMP Series 32-One Months Plan-D-Retail-Dividend 2010340.00 201.0332. Prudential ICICI Institutional Liquid Plan - Super Institutional Daily

Dividend 27353181.25 2735.3233. Principal Cash Management Fund - Liquid Option Instl.Prem.Plan

Dividend Reinvestment Daily 5091418.29 509.1834. Reliance Liquidity Fund - Daily Dividend Reinvestment option 116128988.05 11616.5035. ABN AMRO CASH Fund - Institutional Plus - Daily Dividend 155805059.25 15580.5136. Birla Cash Plus - Instl. Prem. Daily Dividend Reinvestment 97551173.24 9774.1437. Prudential ICICI Floating Rate Plan D - Daily Dividend 101874505.40 10187.4538. UTI Money Market Fund - Daily Dividend Option 4375847.63 762.6939. Kotak Liquid (Institutional Premium) - Daily Dividend 68733757.96 8404.8340. UTI Liquid Cash Plan Institutional - Daily Income Option

Reinvestment (Units of Rs.1000 each) 300849.79 3066.8341. DSP Merrill Lynch Liquid Plus Institutional - Daily Dividend (Units of

Rs.1000) 306026.10 3060.7742. HSBC Liquid Plus - Insl. Plus - Daily Dividend 38162740.26 3819.35

B. Growth Option (Units of Rs.10 each, unless otherwise specified):1. Kotak Liquid (Institutional) - Growth 43101064.87 6255.642. Templeton India Treasury Management Account - Growth

(Units of Rs.1000) 24611.31 437.003. DSP Merrill Lynch Liquid Plus - Growth (Units of Rs.1000) 126863.13 1293.94

40

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE) (Contd.)(fully paid up unless otherwise specified)

Acquired and Sold during the yearNos. Acquisition

Cost(Rs. in lacs)

C. Equity Shares (Quoted)(Shares of Rs.10 each, unless otherwise specified):1. Bayer Crop Science Ltd. 35000.00 70.372. Bharat Earth Movers Ltd 3086.00 29.913. Bombay Dyeing & Manufacturing Co. Ltd 10000.00 72.474. Biocon Limited (Shares of Rs.5) 10000.00 44.695. Binani Industries Limited. 20000.00 39.386. Colgate Palmolive India Limited. 45000.00 169.247. Cadila Healthcare Limited (Shares of Rs.5) 7000.00 23.148. Dabur India Limited. (Shares of Re.1) 51000.00 57.179. Divis Laboratories Limited. 1000.00 27.5710. Era Constructions (India) Limited. 10000.00 49.4311. Eldeco Housing & Industries Limited. 8500.00 37.0412. Finolex Cables Limited. 1439.00 3.5313. Godawari Power & Ispat Limited. 20000.00 23.6614. Great Offshore Limited. 20000.00 133.5715. GTL Limited. 21000.00 32.8916. GTL Infrastructures Limited. 21000.00 16.4517. Hexaware Technologies Limited. (Shares of Rs.2) 25000.00 41.4618. HCL Technologies Limited. (Shares of Rs.2) 36000.00 121.4319. I-Flex Solutions Limited (Shares of Rs.5) 2000.00 39.3120. Indian Hotels Company Limited (Shares of Re.1) 30000.00 13.6121. Infosys Technologies Limited (Shares of Rs.5) 2400.00 10.3422. Info Edge (India) Limited 3000.00 21.4123. Ispat Industries Limited. 125000.00 22.6524. Infrastructure Development Finance Company Limited. 21000.00 19.6025. India Bulls Financial Services Limited (Shares of Rs.2) 8000.00 36.7326. India Bull Realities Limited. 4000.00 12.2427. India Cements Limited. 40000.00 80.6528. Larsen & Toubro Limited (Shares of Rs.2) 2500.00 27.0829. Mahindra Forgings Limited. 65000.00 25.4130. Mid-Day Multimedia Limited. 50000.00 25.1131. New Delhi Television Limited (Shares of Rs.4) 10000.00 25.1232. NIIT Technologies Limited. 2500.00 3.4933. Oriental Paper & Industries Limited. 5000.00 21.0334. Praj Industries Limited (Shares of Rs.2) 175000.00 380.9135. Punj Lloyd Limited (Shares of Rs.2) 15000.00 40.8336. Prajay Engineers Syndicate Limited. 8000.00 25.1837. Prithvi Information Solutions Limited. 4000.00 14.7138. Ranbaxy Laboratories Limited (Shares of Rs.5) 2500.00 9.1139. Reliance Energy Limited. 24375.00 138.6240. Reliance Capital Limited. 250.00 0.5241. Reliance Industries Limited. 91000.00 862.0942. Reliance Petroleum Limited. 5730.00 3.4443. Satyam Computers Services Limited (Shares of Rs.2) 6000.00 21.4344. Shree Cements Limited. 2000.00 20.2645. Suzlon Energy Limited. 4000.00 53.9946. Sasken Communications Technologies Limited. 8000.00 40.9547. TATA Consultancy Services Limited (Shares of Re.1) 4000.00 9.8048. TATA Elexi (India) Limited. 10000.00 22.6749. Tech Mahindra Limited. 5000.00 61.1750. UTV Software Communications Limited. 135092.00 307.0551. Zee Telefilms Limited (Shares of Re.1) 7000.00 21.7052. B.L.Kashyap and Sons Limited 75.00 0.8853. Garware Offshore Services Limited 4152.00 4.5654. Gujarat State Petronet Limited 38165.00 15.35

Book Value Market Value

31st March, 31st March, 31st March, 31st March,2007 2006 2007 2006

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

Aggregate of Quoted Investments 9117.64 10425.48 14973.19 16414.55Aggregate of Unquoted Investments 89329.86 63234.80

98447.50 73660.28

41

31st March, 2007 31st March, 2006(Rs. in lacs) (Rs. in lacs)

SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES(a) Inventories:

(As verified, valued and certified by the Management):(i) Loose Tools 84.75 84.75(ii) Stores and Spare Parts 1561.50 2563.78(iii) Stock-in-Trade:

Raw Materials 4475.97 7001.74Goods-in-Process 8673.34 10004.35Finished Goods 9007.19 8451.76

(iv) Merchanting Goods 2714.92 1311.36(v) Goods-in-Transit 1848.69 2486.42

28366.36 31904.16(b) Sundry Debtors :

(Refer Note 4 )(i) Debts outstanding for a period exceeding six months

Secured (considered good) 144.80 106.32Unsecured -Considered good (including Rs.6.46 lacs duefrom subsidiaries; Previous year Rs.Nil) 1754.96 1329.32

1899.76 1435.64Considered doubtful 386.68 649.83Less: Provision (386.68) (649.83)

— —(ii) Other Debts :

Secured (considered good) 2684.76 2318.51Unsecured -Considered good (including Rs.1499.20 lacsdue from subsidiaries; Previous year Rs.737.21 lacs) 22292.55 21092.59

24977.31 23411.10

26877.07 24846.74(c) Cash and Bank Balances:

(i) Cash on hand (including cheques on handRs. 658.97 lacs; Previous year Rs.248.31 lacs) 709.22 272.62

(ii) Balances with Scheduled Banks:In Current Accounts (including remittances-in-transitRs.0.16 lac; Previous year Rs.2.00 lacs) 1745.14 2129.93In Deposit Account [includes Rs.0.61 lac depositreceipt endorsed in favour of Government authoritiesas security (Previous year Rs.0.64 lac)] 92.20 91.67

(iii) Balances with Non-Scheduled Banks:In Current Accounts:The Municipal Co-operative Bank Limited[Maximum balance during the year Rs.8.82 lacs(Previous year Rs.6.87 lacs)] 3.47 5.59The Hongkong & Shanghai Banking Corporation,Shanghai [Maximum balance during the yearRs. 14.79 lacs (Previous year Rs.9.46 lacs)] 10.87 2.86In Deposit Accounts:The Municipal Co-operative Bank Limited[Maximum balance during the year Rs.0.50 lac(Previous year Rs.0.50 lac)] 0.50 0.50

2561.40 2503.17

C/F 57804.83 59254.07

42

31st March, 2007 31st March, 2006(Rs. in lacs) (Rs. in lacs)

SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES (Contd.)B/F 57804.83 59254.07

(d) Other Current Assets:(i) Export Incentives receivable 412.75 881.76(ii) Dividend, Interest Subsidy and Interest receivable

(Interest accrued on Investments Rs.391.08 lacs;Previous year Rs.88.06 lacs) 1798.92 1149.67

(iii) Claims and Other receivables [Net of provision fordoubtful claims Rs.Nil (Previous year Rs.67.86 lacs)] 758.23 1283.63

2969.90 3315.06

(e) Loans and Advances (Unsecured, consideredgood, unless otherwise specified): [Refer Notes 3 and 5]Subsidiary Companies:Loans and other dues 5362.81 4102.87Loans and Advances to companies and others:

Considered good [includes Rs.30.00 lacs secured] 3716.16 330.00Considered doubtful 32.00 32.00Less: Provision (32.00) (32.00)

— —Advance Tax (Net of provision for tax) — 346.74Advances recoverable in cash or in kind or for valueto be received :

Considered good 6621.60 4405.89Considered doubtful 11.34 104.81Less: Provision (11.34) (104.81)

— —Balances with -

Customs, Excise, etc. 24.52 3.20Others (including with subsidiaries Rs.160.33 lacs;Previous year Rs.160.33 lacs) 5990.77 5253.36

21715.86 14442.06

Per Balance Sheet 82490.59 77011.19

SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities :

Acceptances — 45.09Sundry Creditors [including Rs. 241.32 lacs due asremuneration to the Directors (Previous year Rs.197.21 lacs)][Refer Note 15] 17722.89 16427.41Advances against Sales 771.64 560.35Due to Subsidiary Companies 1007.15 177.84Deposits from Dealers and Agents 5600.62 5318.21Overdrawn Bank Balances 1815.07 1125.67Other Liabilities 2017.25 2044.72Interest accrued but not due 149.28 528.05

29083.90 26227.34(b) Provisions :

For Proposed Dividend 3069.04 3069.04For Tax on Proposed Dividend 521.58 430.43For Taxation (Net of Advance Tax) 468.44 —For Fringe Benefit Tax (Net of Advance Tax) 2.58 24.28For Retirement Benefits 2912.71 2049.21For Excise Duties 223.02 326.40Others 866.29 871.48

8063.66 6770.84

Per Balance Sheet 37147.56 32998.18

43

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 8- SALES, SERVICES AND EXPORT INCENTIVES(1) Gross Turnover (net of usual trade discounts, allowances, etc.)

(a) Manufactured Goods (inclusive of sale ofsemi-finished goods) 122905.41 128602.00

(b) Merchanting Goods 7324.08 5659.59130229.49 134261.59

Less:Sales Returns 690.13 754.80Other discounts and allowances 1632.27 1023.62

2322.40 1778.42127907.09 132483.17

(2) Income from Air Taxi Operations 894.33 348.01(3) Gross Income from Services:

(a) Income from Job Work 2.89 6.53(b) Income from other services 247.50 183.08

(4) Export Incentives, etc. 910.94 1439.20Per Profit and Loss Account 129962.75 134459.99

SCHEDULE 9 - OTHER INCOMEDividends:

From Non-Trade Investments (Tax deducted Rs.Nil;Previous year Rs.Nil )- Current Investments 1073.01 1547.92- Long Term Investments 20.86 —

1093.87 1547.92From Subsidiary companies (Tax deducted Rs.Nil;Previous year Rs.1.57 lacs) 105.15 4.77Interest Income (Tax deducted Rs.151.66 lacs;Previous year Rs.224.62 lacs):- On Long Term Investments 473.70 163.47- Others (Including from subsidiaries Rs.47.04 lacs;

Previous Year Rs.10.06 lacs) 1244.21 1052.971717.91 1216.44

Gain on variation in foreign exchange rates (Net):- On Loans 954.55 —- Others (596.93) —

357.62 —Profit on sale of Current Investments (Net) 3529.05 3872.74Profit on sale of a Long-term Investments (Net) 116.86 43.17Surplus on sale/discardment of Fixed Assets (Net) — 107.91Rent and Compensation 150.60 106.42Credit Balances appropriated (Net) 19.04 9.36Excess provisions written back (Net) 633.90 363.25Sales Tax Refunds 456.10 53.55Miscellaneous Income 897.72 837.98

Per Profit and Loss Account 9077.82 8163.51

SCHEDULE 10 - MATERIAL COSTS(1) Raw Materials consumed:

Opening Stock 7001.74 6000.86Purchases 33027.79 37750.21

40029.53 43751.07Less: - Sales 1022.91 493.67

- Transfer on divestment of Business 2949.17 124.11

36057.45 43133.29Less: Closing Stock 4475.97 7001.74

31581.48 36131.55(2) Merchanting Goods (Cost of goods sold):

Opening Stock 1311.36 1257.23Less : VAT credit availed on Opening Stock — 22.96Add: Purchases 7559.90 4611.29

8871.26 5845.56Less:Closing Stock 2714.92 1311.36

6156.34 4534.20

Per Profit and Loss Account 37737.82 40665.75

44

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 11 - MANUFACTURING AND OPERATING COSTSStores and Spare Parts 9984.79 12176.29Power and Fuel 8532.86 9381.12Repairs to Buildings 664.81 482.56Repairs to Machinery 1293.01 1534.05Other Manufacturing and Operating Expenses 6623.65 5770.90

Per Profit and Loss Account 27099.12 29344.92

SCHEDULE 12 - (INCREASE)/DECREASE IN FINISHED ANDPROCESS STOCK

Opening Stock:Goods-in-Process 10004.35 9325.93Finished Goods 8451.76 8572.87

18456.11 17898.80Closing Stock:

Goods-in-Process 8673.34 10004.35Finished Goods 9007.19 8451.76

17680.53 18456.11

775.58 (557.31)Add/(Less): Variation in excise duty on opening and

closing stock of finished goods 15.87 46.42

Per Profit and Loss Account 791.45 (510.89)

SCHEDULE 13 - EMPLOYMENT COSTSSalaries, Wages, Bonus, etc. [including rent Rs.59.63 lacs(Previous year Rs.69.42 lacs)] 20060.27 18097.90Contribution to Provident and Other Funds 1317.63 1210.85Workmen and Staff Welfare Expenses 1180.49 1089.21

Per Profit and Loss Account 22558.39 20397.96

SCHEDULE 14 - ADMINISTRATIVE, SELLING ANDGENERAL EXPENSES

Insurance (Net) 435.52 485.05Rent 2040.95 1152.58Lease Rentals 19.55 17.16Rates and Taxes 67.89 105.54Advertisement 6641.50 5312.49Commission to Selling Agents 3623.63 3764.40Freight, Octroi, etc. 1130.36 1550.80Bad Debts, Advances and Claims written off 31.20 75.17Provision for Doubtful Debts, Advances and Claims 15.00 270.31Legal and Professional charges 2485.60 1294.13Miscellaneous Expenses 9009.08 8907.13Loss on sale/discardment of Fixed Assets (Net) 409.04 —Provision for diminution in value of Current Investments 140.28 —Loss on variation in foreign exchange rates (net):- On loans — 22.96- Others — 785.06

— 808.02Contribution to Charitable Funds, etc. 56.98 87.06Directors’ Fees 7.05 4.00

Per Profit and Loss Account 26113.63 23833.84

SCHEDULE 15 - FINANCE CHARGESInterest on Debentures and Fixed Loans(Net of Subsidy Rs.1515.12 Lacs, Previous Year Rs.1463.43 Lacs) 3446.42 2328.83Interest - Others 1187.78 1183.29

4634.20 3512.12Commitment and other charges on Loans 205.49 94.98

4839.69 3607.10Less : Borrowing Costs Capitalised (127.78) (79.01)

Per Profit and Loss Account 4711.91 3528.09

45

SCHEDULE 16 - NOTES FORMING PART OF THE ACCOUNTS

1. Loan Funds :(a) 58 Privately Placed Non-Convertible Debentures of Rs.1,00,00,000 each are to be secured by way of mortgage

on all the immovable properties of the Files & Tools Division of the Company situated at Pithampur in the State ofMadhya Pradesh. These debentures have been redeemed after the close of the year before the creation ofsecurity.

(b) Term Loans from Banks:Secured by hypothecation of specified machineries situated at the Company’s Textile Divisions at Thane andJalgaon in the State of Maharashtra, Chhindwara in the State of Madhya Pradesh and Vapi in the State of Gujarat.

(c) Working Capital Loans:Secured by hypothecation of stocks, book debts and other current assets of the Company’s Textile and Files &Tools Divisions.

2. Fixed Assets :(a) In terms of the acquisition proceedings initiated by Thane Municipal Corporation, about 4,222 sq. metres of the

Company’s land at Thane is acquired for the purpose of widening of municipal road. Necessary accounting effectfor the same will be given in the year in which the matter is finally settled.

(b) Buildings include Rs. 10.48 lacs in respect of ownership flats/portions of buildings or Co-operative Housing Societiesand Rs. 0.02 lac in respect of shares held in Co-operative Housing Societies.

(c) Capital work-in-progress includes expenditure during construction period on substantial expansion/newindustrial units of the Company as under:

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

Opening balance 177.78 28.98Add: Incurred during the year:

Employment Costs 29.39 54.75Power and Fuel 8.91 31.79Stores consumption 8.73 10.42Legal and professional charges 4.03 5.70Travelling Expenses 10.55 18.67Depreciation — 8.85Miscellaneous Expenses 47.20 40.37Rent — 3.59Insurance 37.50 51.31

146.31 225.45

324.09 254.43Less: Capitalised during the year (320.52) (76.65)

3.57 177.78

(d) Expenditure incurred by the Company during trial runs in respect of expansion at the Company’s Textile Division( Previous Year Textile and Files & Tools Divisions) has been capitalised on the basis of estimates made and certifiedby the management. The amounts so capitalised are as under:

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

Raw material consumption 200.14 29.68Employment Cost 25.54 4.02Stores and Spares consumption 17.19 17.80Power and Fuel 74.37 93.45Processing Charges 2.58 4.92

319.82 149.87Less: Inter-Unit sale during trial runs (202.08) (48.61)Stock of trial run product (66.70) (29.59)Miscellaneous Income — (0.92)

Trial Run Expenditure capitalised 51.04 70.75

(e) Capital work-in-progress includes:(i) Advances for capital expenditure Rs. 1015.20 lacs (Previous Year Rs.627.54 lacs);(ii) Machineries in transit Rs. 161.57 lacs (Previous year Rs.357.42 lacs);(iii) Intangibles under development Rs. Nil (Previous Year Rs.650.00 lacs).

46

3. (a) The Company has an investment of Rs.271.00 lacs in the shares of Celebrations Apparel Limited (CAL) a whollyowned subsidiary of the Company. Further, the Company has interest free loans, advances and other receivablesamounting to Rs.606.58 lacs recoverable from CAL. The networth of CAL has substantially eroded due to operationallosses. Considering the fact that the investment is of a strategic nature and the business of CAL is in its initial stages,no provision is considered necessary by the Management at present, for any diminution in the value of investmentsand also in respect of losses that may arise in respect of loans to and other receivables from CAL.

(b) The Company has an investment of Rs.1700.00 lacs in the shares of Silver Spark Apparel Limited (SSAL) a whollyowned subsidiary of the Company. Further, the Company has interest free loans, advances and other receivablesamounting to Rs.3518.70 lacs recoverable from SSAL (including Rs.1000.00 lacs, the repayment of which is subjectto approval from a Bank). The networth of SSAL has substantially eroded due to operational losses. Consideringthe fact that the investment is of a strategic nature and the steps taken by the Company to improve SSAL’sperformance resulting in SSAL making a operating profit for the year ended 31st March, 2007, no provision isconsidered necessary by the Management at present, for any diminution in the value of investments and also inrespect of losses that may arise in respect of loans to and other receivables from SSAL.

(c) The Company has an investment of Rs.1500.00 lacs in the shares of Everblue Apparel Limited (EBAL), a wholly ownedsubsidiary of the Company. Further, the Company has interest free loans, advances and other receivablesamounting to Rs.1803.24 lacs recoverable from EBAL. The net worth of EBAL has eroded due to operational losses.During the current year, EBAL has entered into a conducting agreement with Raymond UCO Denim Private Limited(RUDPL) to manufacture Denim Jeans, label, package and store as directed by RUDPL for a yearly conductingfee in addition to reimbursement of certain costs and expenses incurred by EBAL in the manufacturing process.This arrangement is expected to improve the performance of EBAL. Under the circumstances, the Company hasnot provided for any diminution in the value of investments and also in respect of losses that may arise in respectof loans to and other receivables from EBAL.

(d) The Company has an investment of Rs.969.00 lacs in the equity shares of Raymond Fedora Pvt. Ltd. (RFPL), a JointVenture Company. Further, the Company has advances and receivables amounting to Rs.1264.95 lacs recoverablefrom RFPL. The net worth of RFPL has substantially eroded due to operating losses. Considering the fact that theinvestment is of strategic nature and the business of the Company is in its initial stage, no provision is considerednecessary by the management at present, for any diminution in value of investments and also in respect of thelosses that may arise in respect of loans to and receivables from RFPL.

4. Sundry Debtors, considered good, include Rs. 36.70 lacs for the recovery of which the Company has initiated legalactions (Previous year Rs.39.43 lacs).

5. (a) Loans and Advances in the nature of loans: (Rs. in lacs)

Amount Maximum Shares held by outstanding balance Loanee in the Company

during the No. of Maximumyear Shares No.of

outstanding Shares heldat the year-end during the year

(i) Subsidiaries:Raymond Apparel Limited — 2,850.00 — —

(-) (245.41) (-) (-)Pashmina Holdings Limited 300.00 300.00 — —

(300.00) (300.00) (-) (-)Hindustan Files Limited — 278.33 — —

(71.91) (396.29) (-) (-)Everblue Apparel Limited 1802.17 1802.17 — —

(995.67) (1,354.67) (-) (-)Silver Spark Apparel Limited 2016.96 2652.96 — —

(2196.21) (2270.00) (-) (-)Celebrations Apparel Limited 606.08 606.08 — —

(539.08) (539.08) (-) (-)JK Talabot Limited 637.60 637.60 — —

(-) (-) (-) (-)(ii) Associate Companies:

J.K. Investo Trade (India) Limited[Refer Note 5b] 30.00 30.00 13,92,662 13,92,662

(30.00) (30.00) (13,92,662) (13,92,662)P T Jaykay Files Indonesia — 20.59 — —

(2.05) (13.42) (-) (-)(iii) Joint Ventures:

Raymond Fedora Private Limited 653.64 800.00 — —(300.00) (300.00) (-) (-)

Raymond UCO Denim Private Limited(Repayable on or before 6th August, 2013) 2942.50 2942.50 — —

(-) (-) (-) (-)(Figures in bracket relate to previous year)

47

(b) The Company has given loans to J.K. Investo Trade (India) Limited (JKI) aggregating Rs.30.00 lacs being the balanceoutstanding against the amount which the Company had, as a guarantor, paid on behalf of JKI to a bank andpursuant to which the Company stands subrogated, in terms of a Memorandum of Subrogation, to the rights ofthe bank as a mortgagee on the specified immovable properties of JKI.

(c) Advances recoverable in cash or in kind or for value to be received, considered good, includes:

(i) Due from Officers of the Company Rs. 19.93 lacs (Previous year Rs.1.76 lacs); Maximum balance during theyear Rs. 21.71 lacs (Previous year Rs.4.30 lacs).

(ii) Due from Subsidiary Companies Rs. 70.88 lacs (Previous year Rs.57.89 lacs).

6. A. Contingent Liabilities not provided for :31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

(a) Claims against the Company not acknowledged as debts inrespect of past disputed liabilities of the Cement and SteelDivisions divested during the year 2000-2001, Carded Woollenbusiness divested during the year 2005-2006 and Denim Divisiondivested dur ing the current year (interest thereon notascertainable at present).- Excise Matters 1537.37 1486.31- Sales Tax 181.85 181.85- Royalty on Limestone 2201.94 2201.94- Other matters 63.16 68.66

3984.32 3938.76(b) Claims against the Company not acknowledged as debts in

respect of other divisions.- Sales Tax 218.04 509.59- Compensation for Premises 1214.78 1136.08- Stamp Duty 174.16 174.16- Water Charges 84.66 84.44- Provident Fund — 22.66- Other Matters 137.53 104.61

1829.17 2031.54

(c) Bills Discounted with the Company’s bankers 5235.87 4928.59

(d) On account of Letters of Credit issued and bills discounted byCompany’s bankers on behalf of subsidiaries. — 108.10

(e) On account of guarantees given and also on account of theindemnity issued by the Company to the Acquirer of shares ofRecron Synthetics Limited pursuant to an Agreement. 342.70 342.70

(f) On account of corporate guarantee to the bankers/vendorson behalf of subsidiaries for facilities availed by them (amountoutstanding at close of the year) 7733.00 9125.05

(g) Disputed demands in respect of Income-tax, etc. (Interestthereon not ascertainable at present) 6344.63 7499.50

(h) Bonds/Undertakings given by the Company under concessionalduty/exemption scheme to Government authorities (Net ofobligations fulfilled) 6321.91 3787.54

(i) On account of Excise Duty liability on post removal of goodsfrom the place of manufacture. 2118.90 2118.90

(j) Disputed Excise Duty liability in respect of other matters. 2241.54 3718.56

(k) Liability on account of jute packaging obligation upto 30thJune, 1997, in respect of the Company’s erstwhile CementDivision, under the Jute Packaging Materials (Compulsory usein Packing Commodities) Act, 1987. Amount not determinable

(l) Liability in respect of additional stamp duty on the transfer ofimmovable properties of the Company’s erstwhile CementDivision. Amount not determinable

48

(m) Company’s liabilities/ obligations pertaining to the period uptothe date of transfer of the Company’s erstwhile Steel, Cement,Carded Woollen and Denim Divisions in respect of which theCompany has given to the acquirers:- Bank Guarantees 210.00 380.00- Undertakings Amount not determinable

(n) The Wage Agreements in respect of the unionised employeesof Company’s Files and Tools Division situated at Pithampur hasexpired during the financial year 2005-06. The liability onaccount of revision will be accounted in the year of finalisationof the wage agreement.

Note: Item 6A(a), (b), (g), (i) to (l)The Company has taken legal and other steps necessary to protect its position in respect of these claims, whichin its opinion based on legal advice are not expected to devolve. It is not possible to make any furtherdetermination of the liabilities which may arise or the amounts which may be refundable in this respect.

B Estimated amount of contracts remaining to be executed on capitalaccount and not provided for (net of advances). 1996.33 4001.43

C Disclosure in respect of derivative instruments :(a) Derivative instruments outstanding :

Millions

Forward Option Swap(i) Against Exports USD/INR 9.21 (-) — —(ii) Against Imports USD/INR - (1.96) AUD/USD 11.00 (7.75) —

JPY/USD - (49.48) EUR/USD - (1.74) —(iii) Loans taken :

— Principal USD/INR 10.00 (12.80) — JPY/INR 3476.10 (1186.00)— — JPY/USD 2344.80 (2344.80)— — INR/USD 10.00 (-)

— Interest rate — — JPY/USD 2344.80 (2344.80)— — JPY/INR 3476.10 (1186.00)— — USD/INR - (30.50)

(iv) Other Receivables — — —(v) Other Payables — — —

Note: ( ) Denotes previous year’s figures.(b) All the derivative instruments have been acquired for hedging purposes.(c) Foreign currency exposures that are not hedged by derivative instruments :

Millions

USD EURO GBP CHF JPY RMB06-07 05-06 06-07 05-06 06-07 05-06 06-07 05-06 06-07 05-06 06-07 05-06

i) Debtors 2.71 15.62 0.47 4.19 0.046 0.02 — — — — — —ii) Creditors 0.05 0.06 0.18 — — — — 30.01 9.30 — — —iii) Loans taken 10.00 28.50 — — — — — — — — — —iv) Cash & Bank bal. — 0.01 — — — — — — — — 0.09 0.02v) Other Receivables — 0.05 — — — — — — — — — —vi) Other Payables — 0.67 — — — — — — — 21.71 — —

7. A. The Company has, during the year, subscribed to the capital of Joint Venture Company, Raymond UCO DenimPvt. Ltd. (RUDPL) in terms of Framework Agreement and Share Purchase Agreement both dated 1st June, 2006.The Company along with the Joint Venture Partner has undertaken to additionally fund RUDPL in case it fails tomeet certain covenents of the Facility cum Hypothecation Agreement entered into with a Bank.

B. As per the terms of the agreements dated 28th June, 2006 and 8th August, 2006 with RUDPL the Company has,during the year, divested its Denim business at Yavatmal on a going concern basis to RUDPL effective as on 1stAugust, 2006, on the terms and conditions mentioned in the agreements. The financial statements of the yearreflect the impact of these transactions. The surplus arising out of such divestment and the tax expense thereonare as under:

Rs. in lacsSurplus on divestment 8809.32Tax expense:

Current Tax 2212.86Deferred Tax credit (3317.80) (1104.94)

31st March, 2007 31st March, 2006(Rs. in lacs) (Rs. in lacs)

49

8. A. Managerial remuneration under Section 198 of the Companies Act, 1956, paid or payable during the financialyear, to the Directors, as under :

2006-2007 2005-2006(Rs. in lacs) (Rs. in lacs)

Salary, allowances and Gratuity paid 381.60 179.13Contribution to Provident and Other Funds 66.60 29.75Commission 251.32 * 197.21

699.52 406.09Approximate money value of perquisites and benefits 39.77 27.85

739.29 433.94

* Includes Rs.10.00 lacs paid to the non-executive directors for the accounting year 2005-06.

The employee-wise break-up of liability on account of Retirement Schemes based on actuarial valuation is notascertainable. The amounts relatable to the Directors is, therefore, disclosed in the year of payment.

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

B. Statement showing the computation of Net Profit inaccordance with Section 198 (1) of the CompaniesAct, 1956:Profit before Tax - per Profit and Loss Account 23823.28 16370.48Add: Managerial remuneration paid/provided 739.29 433.94

Provision for diminution in value of investments 140.28 —Prior period adjustments (Net) 88.05 (110.63)

967.62 323.31

24790.90 16693.79Less: Profit on sale of Investments (net) 3645.91 3915.91

Exceptional Items (net) 8124.64 (994.67)Surplus on disposal of Fixed Assets as perSection 349 — 24.94Provision for diminution in value of investmentswritten back — 193.09Provision for Wealth Tax 28.00 33.00

11798.55 3172.27

Net Profit in accordance with Section 198 (1)/349 12992.35 13521.52

Commission payable:(i) to the Chairman and Managing Director @ 1%

of said Net Profit 129.92 135.21(ii) to the Wholetime Director @ 1% of said

Net Profit subject to a ceiling of annual salary 86.40 47.00(iii) to other Directors 35.00 15.00

9. Auditor’s Remuneration:(i) Fees as Auditor 30.87 30.87(ii) For other services 22.28 11.54(iii) Out-of-pocket expenses 2.07 4.03

10. Imports:Value of imports (including in-transit) calculated on C.I.F. basisin respect of -(i) Raw Materials, Merchanting Goods, etc. 13031.40 10752.19(ii) Stores and Spare Parts 1708.66 2870.97(iii) Capital Goods 18790.81 15528.23(iv) Repairs 180.55 31.06

50

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

11. Expenditure in Foreign Currency on account of:(i) Interest and Finance Charges 1658.49 703.71

(ii) Export Sales Commission 821.34 1091.37

(iii) Advertisement expenses 210.04 382.31

(iv) Foreign travel, subscription, etc. 483.11 640.66

(v) Conference expenses 67.66 403.57

(vi) Consultancy charges 664.99 147.72

(vii) Repairs and Maintenance 16.06 531.72

(viii) Employment Costs 40.52 68.98

(ix) Assets purchased at a foreign branch — 0.66

(x) Others 270.65 94.32

12. Remittance in Foreign Currency on account of dividends:

Paid in 2006-2007 Paid in 2005-2006

(a) Year to which the dividend relates 2005-2006 2004-2005

(b) Number of non-resident shareholders to whomremittances were made 40 38

(c) Number of shares on which remittances were made 42489 41969

(d) Amount remitted (Rs. in lacs) 2.12 1.68

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

13. Earnings in Foreign Currency:

(i) Export of goods calculated on FOB basis 20807.02 26867.23

(ii) Earnings from Air Taxi Operations 47.04 4.52

(iii) Interest and Dividend (net of taxes) 2.69 4.75

(iv) Sale of assets 1744.22 4.52

(v) Others 10.46 1.67

14. Revenue expenditure, including overheads on research and development incurred and charged out during the yearthrough the natural heads of account, aggregate Rs.35.13 lacs. The capital expenditure incurred for research anddevelopment purposes, aggregate Rs.Nil.

15. (a) Sundry Creditors in Schedule 7(a) to the Accounts includes (i) Rs.17.14 lacs (Previous year Rs.29.78 lacs) due toSmall Scale Industrial Undertakings (ii) Rs.17705.75 lacs (Previous year Rs.16397.63 lacs) due to other creditors. Thedisclosure is based on the information available with the Company regarding the status of suppliers under the“Industries (Development and Regulation) Act, 1951”.

Names of Small Scale Industrial Undertakings to whom any amount was payable and outstanding for more than30 days are as under:

1 Alok Industries 6 Shree Corrugaters & Packers2 K. Sanjay Industries 7 Vari Polymers3 Kinetic Gears 8 Shrirampur Board Mills4 Nagpur Packaging Pvt. Ltd. 9 Suresh Board Mills5 Raviraj Plastics 10 Trugrarh Charts Pvt. Ltd.

(b ) In the absence of necessary information with the Company, relating to the registration status of suppliers underthe Micro, Small and Medium Enterprises Development Act, 2006, the information required under the said Act couldnot be compiled and disclosed.

51

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

16. Prior period adjustments represent :

Debits relating to earlier years 69.55 150.28

Credits relating to earlier years (147.67) (41.04)

Depreciation/Amortisation adjustments (net) (9.93) 1.39

(88.05) 110.63

17. Exceptional Items:(a) Net surplus on divestment of denim business as a

going concern (Refer Note 7 ) 8809.32 —

(b) VRS payments (684.68) (888.31)

(c) Net surplus on divestment of carded Woollenbusiness as a going concern — 996.54

(d) Loss on sale of investments and Provision fordiminution in value of long term investments inSubsidiary/Associate — (1,249.94)

(e) Discount on pre-payment of Sales Tax Deferment Loan — 147.04

8124.64 (994.67)

(Rs. in lacs)As at 31-3-2007 As at 31-3-2006 As at 31-3-2005

18. Deferred Tax :

Deferred Tax Liability on account of :

Depreciation 7479.17 8364.14 6765.13

Deferred Tax Asset on account of :

(i) VRS Payments 706.61 749.98 689.76

(ii) Other Employee benefits 789.27 520.59 431.97

(iii) Taxes, Duties, Cess, etc. 206.57 202.69 5.78

(iv) Provision for doubtful debts, etc. 158.49 242.64 218.61

(v) Provision for diminution in value of Investments 2.91 225.93 2.88

(vi) Others 27.59 19.58 13.78

1891.44 1961.41 1362.78

Deferred Tax (Net) 5587.73 6402.73 5402.35

52

19. Related parties disclosures :

1. Relationships :

(a) Subsidiary Companies :Raymond Apparel LimitedPashmina Holdings LimitedEverblue Apparel LimitedJaykayorg AGJ.K. (England) LimitedRegency Texteis Portuguesa, LimitadaTextiles Regency, Socied Limitada (up to 30th Sept., 2005)Hindustan Files LimitedColorplus Fashions LimitedSilver Spark Apparel LimitedPlugin Sales Limited ( up to 25th March, 2006)Celebrations Apparel LimitedRing Plus Aqua LimitedR&A Logistics Inc.Scissors Engineering Products LimitedJK Talabot LimitedRaymond Europe S.r.l.

(b) Joint Ventures :Raymond Zambaiti Private LimitedRaymond Fedora Private LimitedRaymond UCO Denim Private Limited and its subsidiaries;

UCO General Holding LLC,UCO Spinning Ltd. Partnership,UCO Fabrics Inc.,UCO Sportswear International NV,UCO Tesatura SRL,UCO Raymond Denim Holding NV,UCO Ltd. LLC

GAS Apparel Pvt. Ltd.Rose Preci-Form Pvt. Ltd.

(c) Other related parties where control exists :J.K. Investo Trade (India) LimitedP.T. Jaykay Files IndonesiaJ.K. Helene Curtis LimitedJ.K. Ansell LimitedJ.K. Investors (Bombay) LimitedRadha Krshna Films Limited

(d) Key Management Personnel :Mr. Gautam Hari SinghaniaMr. Pradeep Kumar Bhandari

(e) Relatives of key management personnel and their enterprises where transactions have taken place :Dr. Vijaypat SinghaniaSilver Soaps Private Limited

Note : Related party relationship is as identified by the Company and relied upon by the Auditors.

53

2. Transactions carried out with related parties referred in 1 above, in ordinary course of business: (Rs. in lacs)

Related Parties

Nature of transactions Referred in Referred in Referred in Referred in Referred in1(a) above 1(b) above 1(c) above 1(d) above 1(e) above

PurchasesGoods and Materials 5426.14 554.80 688.74 — —

(2450.50) (211.55) (559.97) (-) (-)Fixed Assets 1.76 — 7.91 — —

(8.71) (-) (15.10) (-) (-)SalesGoods and Materials 6147.83 359.91 95.20 — —

(6544.91) (145.88) (134.06) (-) (-)Fixed Assets 8.12 24.79 0.90 — —

(8.06) (148.21) (5.09) (-) (-)Sale of Business — 33075.25 — — —

(-) (2609.41) (-) (-) (-)ExpensesRent and other service charges 92.49 13.90 759.70 — 3.00

(98.22) (3.54) (573.21) (-) (3.00)Job work charges 338.81 — — — —

(1441.42) (-) (-) (-) (-)Agency Commission 536.48 — 312.68 — —

(604.14) (-) (310.51) (-) (-)Remuneration — — 10.26 704.28 3.22

(-) (-) (-) (418.94) (1.98)Interest paid — — 20.74 — —

(-) (-) (16.09) (-) (-)Professional Fees — — — — 58.90

(-) (-) (-) (-) (33.06)Directors’ Fees — — — — 1.15

(-) (-) (-) (-) (0.30)Other Reimbursements 45.71 — 10.32 — —

(70.49) (-) (6.99) (-) (-)IncomeRent and other service charges 265.42 352.85 180.42 — —

(77.05) (69.81) (43.13) (-) (-)Interest received 47.04 198.12 2.70 — —

(10.06) (4.88) (3.30) (-) (-)Other ReceiptsDeputation of staff 14.40 25.32 90.00 — —

(61.55) (49.12) (119.74) (-) (-)Advertisement Reimbursements 65.99 — — — —

(110.15) (-) (-) (-) (-)Other reimbursements 77.48 — 39.60 — —

(247.47) (31.51) (34.60) (-) (-)FinanceLoans and Advances given # 5368.59 5531.62 — — —

# (5980.11) (300.00) (-) (-) (-)Property Deposit paid — — — — —

(10.33) (-) (-) (-) (-)Investments made 3686.66 23741.19 — — —

(7826.21) (4825.00) (-) (-) (-)Sale of Investment — — — — —

(3429.94) (-) (-) (-) (-)OutstandingsCommitments given on behalf of 11102.28 Refer Note 7 — — —

(11202.20) (-) (-) (-) (-)Payable 1007.15 385.83 37.19 — —

(177.84) (33.07) (161.91) (-) (-)Receivable 1576.54 904.03 40.04 — —

(795.10) (-) (19.07) (-) (-)Agency/Property Deposits received — 1.00 207.40 — —

(-) (-) (207.40) (-) (-)Security Deposit paid 150.00 — — — —

(150.00) (-) (-) (-) (-)Loans and Advances ** 5362.81 3596.14 30.00 — —

** (4102.87) (300.00) (30.00) (-) (-)Property Deposit paid 10.33 1.00 2935.85 — —

(10.33) (-) (2935.85) (-) (-)

** includes Rs.4425.21 lacs, interest free (Previous year Rs.3802.87 lacs)# includes Rs.1888.50 lacs, interest free (Previous year Rs.5680.11 lacs)

(Previous year figures are in brackets)

54

As at 31.03.2007 As at 31.03.2006(Rs.in lacs) (Rs. in lacs)

20. (a) Assets acquired on hire purchase arrangement:

(i) The total of minimum hire instalments payable at the Balance Sheetdate are as under:

For a period not later than one year — 8.75

For a period later than one year and not later than five years — —

For a period later than five years — —

(ii) Hire charges recognised in the Profit and Loss Accounts -

Rs.8.75 lacs (Previous year Rs.50.00 lacs)

(b) Premises taken on operating lease:

The total future minimum lease rentals payable at theBalance Sheet date is as under:

For a period not later than one year 1722.67 738.61

For a period later than one year and not later than five years 2926.80 1525.80

For a period later than five years 328.40 518.34

(c) Premises given on operating lease:

(i) Buildings:

Gross carrying amount 244.74 244.74

Depreciation for the year 8.53 8.61

Accumulated Depreciation 28.74 20.21

The value of portions of premises given on operating leaseis not disclosed above since identification of value relatableto the portion is not possible.

(ii) The total future minimum lease rentals receivable at theBalance Sheet date is as under:

For a period not later than one year 79.10 50.35

For a period later than one year and not later than five years 138.01 185.49

For a period later than five years 2.88 2.88

Year ended Year ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

21. Computation of Profit for Earnings per Share:Profit for the year after tax 20125.28 12229.10

Add/(Less): Prior period adjustments (Net) 88.05 (110.63)

Add /(Less): Excess/(Short) Provision for tax in respect of earlier years (1.30) (18.00)

Profit including exceptional items 20212.03 12100.47

Add/(Less): Exceptional items (net of taxes) (9461.84) 516.83

Profit excluding exceptional items 10750.19 12617.30

Nominal value per share in Rupees 10.00 10.00

55

22. Capacity and Production(Annual Capacity)

As at 31st March, 2007 As at 31st March, 2006

Licensed/ * Installed Licensed/ * InstalledRegistered Registered

(A) Licensed and Installed Capacities:Wool Combing - Lac Kgs. 13.60 13.60 13.60 13.60Wool Combing - Lac Kgs. 22.58 (e) 22.58 15.00 (e) 15.00Wool Spinning - Spindles 1,440 1,440 1,440 1,440Worsted Spinning - Spindles 22,700 22,700 22,700 22,700Worsted Spinning - Spindles 36,888 (e) 36,888 26,520 (e) 26,520Synthetic Spinning - Spindles 13,728 (d) 13,728 13,728 (d) 13,728Synthetic Spinning - Spindles 3,840 3,840 3,840 3,840Weaving - No. of Looms 246 246 271 271Weaving - No. of Looms 149 (e) 149 103 (e) 91Weaving - No. of Looms 32 32 32 Under InstallationHosiery - No. of Machines Not specified 37 Not specified 37Looms for Plush Fabrics 19 (e) 19 20 (e) 20Denim Fabrics - Million Sq. Mtrs. (d) 67.20 (d) 67.20Cotton Yarn - Million Kgs. (d) 22.26 (d) 18.80Files & Rasps - Lac Doz. 15.22 (b) 19.84 15.22 (b) 19.84

(a) 4.62 (a) 4.62(c) 18.00 6.00 (c) 18.00 6.00(d) 30.00 9.16 (d) 30.00 9.16(e) 12.00 - (e) 12.00 -

File Making Machine - Rs. in lacs 50.00 (b) 50.00 50.00 (b) 50.00High Carbon/Alloy Steel Profiles - M.T. 600 - 600 -

(e) 1000 - (e) 1000 -H.S.S. Twist Drills - Lac Nos. (a) 54.00 54.00 (a) 54.00 54.00

(c) 76.00 22.00 (c) 76.00 22.00(d) 60.00 60.00 (d) 60.00 60.00

Tool bits - Lac Nos. (a) 3.30 1.00 (a) 3.30 1.00(c) 3.30 - (c) 3.30 -(d) 3.30 - (d) 3.30 -

Metal working Blank Saw Blades -Million Run. Mtr. (c) 4.00 - (c) 4.00 -Hack Saw Blades - Million Nos. (c) 10.00 - (c) 10.00 -Metal Slitting Saws - Thousand Nos. (c) 10.00 - (c) 10.00 -End Mills - Lac Nos. (a) 1.00 - (a) 1.00 -

(c) 1.00 - (c) 1.00 -(d) 1.00 - (d) 1.00 -

Reamers - Lac Nos. (a) 1.00 - (a) 1.00 -(c) 1.00 - (c) 1.00 -(d) 1.00 - (d) 1.00 -

Bars & Rods - M.T. (d) 24,000 6,000 (d) 24,000 6,000(e) 500 - (e) 500 -

Other Hand Tools of a kind used inagriculture, horticulture, forestry(Matchet - Lac Nos.) (d) 6.00 (d) 6.00

* As certified by the Management and being a technical matter, accepted by the Auditors as correct.

(a) Per Letter of Intent

(b) Based on Licensed Capacity

(c) Registered Capacity with DGTD

(d) Per Memorandum of Information filed with Secretariat for Industrial Approvals, Government of India

(e) Installed against Industrial Entrepreneurs Memorandum

}}

56

Year Ended Year Ended31st March, 2007 31st March, 2006

(B) Actual ProductionFabrics Lac Mtrs. 301.47 257.80Rugs, Blankets and Shawls Lac Pcs. 0.13 1.46Furnishing Fabrics Lac Mtrs. 7.22 6.34Garments Lac Pcs. - 0.01Denim Fabrics Lac Mtrs. 106.84 277.61Cotton Yarn Lac Kgs. 51.05 131.94Files and Rasps Lac Dozs. 39.97 40.08H.S.S.Twist Drills Lac Nos. 111.41 123.45Bars and Rods (HRS) $ M.T. 5714.90 5562.98

$ 5096.10 M.T. used for captive consumption; Previous year 4558.64 M.T.

23. Material ConsumptionImported and Indigenous materials consumed:

Year Ended Year Ended31st March, 2007 31st March, 2006

(Rs. in lacs) % (Rs. in lacs) %(i) Raw Materials:

Imported 12050.21 38.16 12662.53 35.05Indigenous 19531.27 61.84 23469.02 64.95

31581.48 100.00 36131.55 100.00

(ii) Stores and Spare Parts:Imported 2450.25 24.54 3058.33 25.12Indigenous 7534.54 75.46 9117.96 74.88

9984.79 100.00 12176.29 100.00

24. Information pursuant to para 3(i)(a) and 3(ii)(d) of Part II of Schedule VI to the Companies Act, 1956, has not been givenin view of the exemption granted by the Government of India, Ministry of Finance, Department of Company Affairs, videtheir letter No.46/258/2006-CL-III dated 31st January, 2007. The exemption is valid for the financial year ended 31st March,2007.

25. Information on Joint Ventures:

i) Jointly controlled entities.

Sr. Name of the Joint Venture Country of Percentage ofNo. Incorporation Ownership interest

1) Raymond Zambaiti Private Limited India 50%2) Raymond Fedora Private Limited India 50%3) Raymond UCO Denim Pvt. Ltd.

( w.e.f. 1st August,2006) India 50%

(Rs.in lacs)2006-07 2005-06

ii) Contingent Liabilities in respect of Joint Ventures.a) Directly incurred by the Company - -b) Share of the Company in contingent liabilities which have been

incurred jointly with other ventures - -c) Share of the Company in contingent liabilities incurred by jointly

controlled entity (to the extent ascertainable) 4602.16 2455.60d) Share of other ventures in contingent liabilities incurred by jointly

controlled entity. - -

iii) Capital commitments in respect of Joint Venturesa) Direct Capital commitments by the Company - 242.00b) Share of the Company in capital commitments which have been

incurred jointly with other ventures [Refer Note 7] -c) Share of the Company in capital commitments of the jointly

controlled entity. 138.95 1106.08

57

(Rs.in lacs)

2006-07 2005-06

iv) Interest in the assets, liabilities, income and expenses with respect to jointly controlled entities.

A) Assets:a) Fixed Assets (Net Block) 27743.58 848.62

Capital Work-in Progress 526.38 6875.47b) Investments 16187.71 2101.33c) Current Assets, Loans and Advances:

Inventories 5212.70 599.74Sundry Debtors 3438.80 141.90Cash and Bank Balances 391.87 141.02Loans and Advances 3177.53 170.78Other Current Assets - 127.76

B) Liabilities:1) Loan Funds:

Secured Loans 19693.82 5377.31Unsecured Loans 1799.35 150.00

2) Current Liabilities and Provisions:Liabilities 3866.36 741.69Provisions 224.73 24.06

3) Deferred Tax Liability (Net) - -

C) Income:a) Sales and Export Incentives 15732.94 614.05b) Other Income 315.66 16.07

D) Expenditure:a) Material Costs 7804.95 161.03b) Manufacturing Expenses and Inventory Variation 4112.60 348.07c) Employment Costs 1432.36 102.48d) Administrative, Selling and Other Expenses 1605.95 88.21e) Finance Charges 868.46 41.74f) Deprecation 1966.26 26.46g) Trial Run Expenditure Capitalised (157.55) -h) Provision for Taxation (including Fringe Benefit Tax) 8.55 0.48

26. Previous year’s figures have been regrouped/recast wherever necessary. In view of the divestment of Denim business,the figures of current year are not comparable with corresponding figures of previous year.

27. Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed tothese Accounts as Annexure I.

Signatures to Schedules 1 to 16As per our Report of even date GAUTAM HARI SINGHANIA

Chairman and Managing DirectorFor and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

}

58

ANNEXURE ISTATEMENT OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES(annexed to and forming part of the Accounts for the year ended 31st March, 2007)I. RECOGNITION OF INCOME AND EXPENDITURE :

(i) Revenues/Incomes and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.(ii) Sale of Goods is recognised on transfer of significant risks and rewards of ownership which is generally on the

dispatch of goods.(iii) Benefit on account of entitlement to import duty-free materials under the “Duty Entitlement Pass Book Scheme”

is accounted in the year of export.(iv) Compensation to employees under Voluntary Retirement Scheme (VRS) is written off in the year of payment.

II. USE OF ESTIMATES :The preparation of financial statements in conformity with generally accepted accounting principles requires estimatesand assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Differences betweenactual results and estimates are recognised in the period in which the results are known/materialised.

III. FIXED ASSETS :Fixed Assets (other than livestock) are stated at cost, less accumulated depreciation (other than ‘Freehold Land’ whereno depreciation is charged). Livestock are stated at Book Value.

IV. METHOD OF DEPRECIATION AND AMORTISATION :(i) Depreciation on Factory Buildings, Plant and Machinery, Electrical Installations and Equipment and Aircraft is

provided on the Straight Line Method (S.L.M.) by writing off 95% of the cost of the assets over the ‘Specified Period’of the assets in accordance with the provisions of Section 205(2)(b) of the Companies Act, 1956;

(ii) Depreciation on other Fixed Assets (other than ‘Land’ and ‘Livestock’ where no depreciation is provided), is providedon the “Written Down Value Method” (W.D.V.) at the rates specified in Schedule XIV to the Companies Act, 1956from time to time;

(iii) Depreciation on all assets referred to in (i) above, acquired upto 31st March, 1987, is provided at the rates ofdepreciation prevalent at the time of acquisition of the assets, in pursuance of Circular No. 1 of 1986, (1.1/86-CL-V) dated 21st May, 1986, issued by the Company Law Board;

(iv) Depreciation on additions to Fixed Assets after 1st April, 1987 is provided at the relevant rates of depreciation inrespect of S.L.M. and W.D.V., as specified in Schedule XIV to the Companies Act, 1956 from time to time;

(v) Depreciation on additions to assets or on sale/discardment of assets, is calculated pro rata from the month ofsuch addition or upto the month of such sale/discardment, as the case may be;

(vi) Cost of Technical Know-how capitalised is amortised over a period of six years thereof;(vii) Cost of Customised Software capitalised is amortised over a period of three years;(viii) Cost of Leasehold Land is amortised over the period of lease.

V. INVESTMENTS :Investments are classified into Current and Long-term Investments. Current Investments are stated at lower of cost andfair value. Long-term Investments are stated at cost. A provision for diminution is made to recognise a decline, otherthan temporary, in the value of Long-term Investments.

VI. VALUATION OF INVENTORIES :Inventories of Raw Materials, Goods-in-Process, Finished Goods and Merchanting Goods are stated ‘at cost or netrealisable value, whichever is lower’. Stores and Spare Parts are stated ‘at or below cost’. Goods-in-Transit are stated‘at cost’. Cost comprise all cost of purchase, cost of conversion and other costs incurred in bringing the inventories totheir present location and condition. The excise duty in respect of closing inventory of finished goods is included aspart of finished goods. Cost formulae used are ‘First-in-First-out’, ‘Average cost’ or ‘Specific identification’, as applicable.Due allowance is estimated and made for defective and obsolete items, wherever necessary, based on the pastexperience of the Company.

VII. FOREIGN CURRENCY TRANSLATIONS :(i) All loans and deferred credits repayable in Foreign Currency and outstanding at the close of the year are

expressed in Indian Currency at the appropriate rates of exchange prevailing on the date of the Balance Sheet,except in cases where these borrowings are covered by forward exchange contracts. Any increase or reductionin these liabilities, to the extent they relate to borrowings for financing imported fixed assets, is shown as additionto or deduction from the cost of the assets acquired out of such borrowings, and the balance is booked to revenue.In respect of transactions covered by Forward Exchange Contracts, the difference between the forward rate andexchange rate at the inception of the contract is recognised as income or expense over the life of the contract.

(ii) Balances in the form of Current Assets and Current Liabilities in foreign currency, outstanding at the close of theyear, are converted in Indian Currency at the appropriate rates of exchange prevailing on the date of the BalanceSheet. Resultant gain or loss is accounted during the year;

(iii) Investments in shares of foreign subsidiary companies are expressed in Indian Currency at the rates of exchangeprevailing at the time when the original investments were made;

(iv) All other incomes or expenditure in foreign currency, are recorded at the rates of exchange prevailing on thedates when the relevant transactions take place.

(v) Transactions covered by cross currency swap contracts to be settled on future dates are recognised at the ratesof exchange of the underlying foreign currency prevailing on the date of the Balance Sheet. Effects arising outof swap contracts are accounted/adjusted on the date of settlement.

(vi) Accounting of foreign branch:(a) Current assets and liabilities are converted at the appropriate rates of exchange prevailing on the date of

the Balance Sheet.(b) Fixed Assets are converted at the exchange rates prevailing on the date of the transaction.(c) Revenue items, except depreciation, are converted at monthly average rates of exchange.(d) Depreciation has been translated at the exchange rates used for the conversion of respective fixed assets.

59

VIII. RESEARCH AND DEVELOPMENT :Revenue expenditure, including overheads on Research and Development, is charged out as an expense throughthe natural heads of account in the year in which incurred. Expenditure which results in the creation of capital assetsis taken as Fixed Assets and depreciation is provided on such assets as are depreciable.

IX. RETIREMENT BENEFIT :(i) Gratuity liability under the Payment of Gratuity Act is based on actuarial valuation carried out at the close of the

financial year after considering the funds available with the Trustees of the Gratuity Fund. Effect of changes inassumptions adopted by the actuary, are duly given effect to in the Profit and Loss Account.

(ii) Provision for leave entitlement is accrued and provided for at the end of the financial year, on the basis of anactuarial valuation.

(iii) Retirement benefit in the form of Provident Fund and Superannuation/Pension Schemes whether in pursuance ofany law or otherwise is accounted on accrual basis and charged to the Profit and Loss Account of the year.

X. PROJECT DEVELOPMENT EXPENSES PENDING ADJUSTMENT :Expenditure incurred during developmental and preliminary stages of the Company’s new projects, are carried forward.However, if any project is abandoned, the expenditure relevant to such project is written off through the natural headsof expenses in the year in which it is so abandoned.

XI. BORROWING COSTS :Interest and other borrowing costs attributable to qualifying assets are capitalised. Other interest and borrowing costsare charged to revenue.

XII. GOVERNMENT GRANTS:Grants received against spcific fixed assets are adjusted to the cost of the assets. Revenue Grants are recognised inthe Profit and Loss Account in accordance with the related scheme and in the period in which these are accrued.

XIII. EXPENDITURE DURING CONSTRUCTION AND ON NEW PROJECTS :In the case of new industrial units and substantial expansion of existing units, all pre-operating expenditure specificallyfor the project, incurred upto the date of installation, is capitalised and added pro rata to the cost of fixed assets.

XIV. APPLICATION OF SECURITIES PREMIUM ACCOUNT :Share and Debenture Issue expenses and Premium payable on redemption of Debentures, are charged, first againstavailable balance in Securities Premium Account.

XV. TAXATION :Income-tax expense comprises current tax, fringe benefit tax (FBT) and deferred tax charge or credit. Provision forcurrent tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.Provision for FBT is made on the basis of the fringe benefits provided / deemed to have been provided during theyear at the rates and values applicable to the relevant assessment year. The deferred tax asset and deferred tax liabilityis calculated by applying tax rate and tax laws that have been enacted or substantively enacted by the BalanceSheet date. Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciationunder tax laws, are recognised, only if there is a virtual certainty of its realisation, supported by convincing evidence.Deferred tax assets on account of other timing differences are recognised only to the extent there is a reasonablecertainty of its realisation. At each Balance Sheet date, the carrying amount of deferred tax assets are reviwed toreassure realisation.

XVI. IMPAIRMENT OF ASSETS:The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairmentbased on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverableamount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified asimpaired. An impairment loss recognised in prior accounting periods is reversed if there has been change in the estimateof the recoverable amount.

RESEARCH AND DEVELOPMENT EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007(Rs. in lacs)

MaterialsStores, spares and chemicals consumed 4.23

PersonnelWages, salaries, bonus, etc. 21.91Workmen and staff welfare expenses 0.16Contribution to Provident and other Funds 1.71

23.78Other Expenditure

Repairs and maintenance, conveyance, travelling, car expenses, etc. 4.53

Miscellaneous expenses 0.28

4.81Depreciation 2.31

Total 35.13

This information is given pursuant to the recognition granted to the Company’s Research & Development Laboratory atJekegram, Thane by the Department of Scientific & Industrial Research, Ministry of Science & Technology, Government ofIndia, vide their letter No. TU/IV-RD/2505/2005 dated 24th May, 2005, which is valid upto 31st March, 2008.

60

CONSOLIDATED ACCOUNTS

61

AUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF RAYMOND LIMITED ON THECONSOLIDATED FINANCIAL STATEMENTS OF RAYMOND LIMITEDWe have examined the attached Consolidated Balance Sheet of Raymond Limited, its subsidiaries and its joint ventures as at 31st March, 2007,the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year then ended.These consolidated financial statements are the responsibility of the management of Raymond Limited. Our responsibility is to express an opinion on theseconsolidated financial statements based on our audit. We conducted our audit in accordance with the generally accepted auditing standards in India.These Standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in allmaterial respects, in accordance with an identified financial reporting frame work and are free of material misstatement. An audit includes, examining ona test basis, evidence supporting the amounts and disclosures in financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basisfor our opinion.We have audited the financial statements / consolidated financial statements of following Indian subsidiaries and Joint Ventures, whose totalassets as at 31st March, 2007 and total revenues for the year then ended are as under:

Rs. in lacsName of the Companies Total Assets Total Revenuesa. Indian Subsidiaries

Everblue Apparel Limited 5083.50 1684.75Silver Spark Apparel Limited 8548.30 7324.98Celebrations Apparel Limited 1816.46 531.38JK Talabot Limited 2463.42 192.94Scissors Engineering Products Limited(consolidated financial statements) 7226.98 8105.07

b. Joint VenturesRaymond Fedora Private Limited 5428.63 2345.55Raymond Zambaiti Private Limited 20269.00 3343.95Raymond UCO Denim Private Limited(consolidated financial statements) 128989.68 51924.58

We did not audit the financial statements / consolidated financial statements of following Indian subsidiaries and Indian associates. Thesefinancial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to theamounts included in respect of these subsidiaries and associates, is based solely on the reports of the other auditors. The total assets as at 31st

March, 2007 and total revenue for the year then ended, in respect of these subsidiaries and associates are as under:

Rs. in lacs

Name of the Companies Total Assets Total Revenuesa. Indian Subsidiaries

Raymond Apparel Limited (consolidated financial statements) 26644.11 36025.64Pashmina Holdings Limited 1192.67 32.03Hindustan Files Limited 1125.06 2864.13

b. Indian AssociatesJ.K. Investo Trade (India) Limited(consolidated financial statements) 6786.82 11357.51Radha Krshna Films Limited 114.45 0.20

We also did not audit the financial statements of Raymond Europe S.r.L., a subsidiary of Raymond Limited. The financial statements of the saidsubsidiary for the period ended 31st March 2007, were compiled by the management and were not audited. The total assets as at 31st March2007 are Rs.145.83 lacs and total revenue for the period ended 31st March 2007 are Rs.231.32 lacs. The size of the said subsidiary, in theconsolidated position, is not significant in relative terms.We also did not audit the financial statements of other Foreign subsidiaries and the Foreign associate. These financial statements have beenaudited as at 31st December, 2006 by other auditors, whose reports have been furnished to us. However, since these financial statements,which were compiled by the management of these companies, for the financial year ended 31st March, 2007, were not audited, any adjustmentsto their balances, could have consequential effect on the attached consolidated financial statements. However, the size of these subsidiariesand the associate, in the consolidated position, is not significant in relative terms. The total assets as at 31st March, 2007 and total revenue forthe year then ended, in respect of these Foreign subsidiaries and the Foreign associate are as under:

Rs. in lacsName of the Companies Total Assets Total Revenuesa. Foreign Subsidiaries

Jaykayorg AG 2569.96 505.28J.K. (England) Limited 266.68 305.59Regency Texteis Portuguesa, Limitada 3095.65 4803.79

b. Foreign AssociateP.T. Jaykay Files Indonesia 1750.81 2519.45

We report that the consolidated financial statements have been prepared by the Company in accordance with the requirements of AccountingStandard (AS) 21 – ‘Consolidated Financial Statements’, Accounting Standard (AS) 23 – ‘Accounting for Investments in Associates in Consolidated FinancialStatements’ and Accounting Standard (AS) 27 – ‘Financial Reporting of Interests in Joint Ventures’, issued by the Institute of Chartered Accountants ofIndia and on the basis of the separate audited/certified financial statements of Raymond Limited, its subsidiaries, its joint ventures and its associates.On the basis of the information and explanations given to us, we are of the opinion that, except for the consequential effect, if any, on account of possibleadjustments stated above and read together with Note No. 10 in Schedule 16 relating to the change in accounting policy in respect of Goodwill arisingon consolidation, resulting in the profit for the year before tax being higher by Rs.10040.23 lacs and Reserves and Surplus being higher by the same amount:(a) the Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of Raymond Limited, its subsidiaries and its

joint ventures as at 31st March, 2007;(b) the Consolidated Profit and Loss Account gives a true and fair view of the consolidated results of operations of Raymond Limited, its

subsidiaries and its joint ventures for the year then ended, and(c) the Consolidated Cash Flow Statement gives a true and fair view of the consolidated cash flows of Raymond Limited, its subsidiaries and

its joint ventures for the year ended on that date.For and on behalf of

DALAL & SHAHChartered Accountants

Ashish DalalPartner

Mumbai: 27th April, 2007 Membership No.33596

62

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2007

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006

Schedule subsidiaries Ventures subsidiaries VenturesNo. (Rs. in lacs) (Rs. in lacs)

SOURCES OF FUNDS:Shareholders’ Funds:

Share Capital 1 6138.08 — 6138.08 6138.08 — 6138.08Reserves and Surplus 2 136846.67 517.14 137363.81 121334.32 (97.01) 121237.31Joint Ventures Control Account (25402.47) 25402.47 — (4294.56) 4294.56 —

117582.28 25919.61 143501.89 123177.84 4197.55 127375.39Loan Funds: 3

Secured Loans 71290.84 33425.49 104716.33 65849.98 5377.31 71227.29Unsecured Loans 22850.57 4451.97 27302.54 22745.89 150.00 22895.89

94141.41 37877.46 132018.87 88595.87 5527.31 94123.18Deferred Tax Liability (Net) 6189.01 481.08 6670.09 7020.53 — 7020.53(Refer Note No.8)Minority Interest 604.60 — 604.60 2234.40 — 2234.40

TOTAL 218517.30 64278.15 282795.45 221028.64 9724.86 230753.50

APPLICATION OF FUNDS:Fixed Assets: 4

Gross Block 155687.07 72602.14 228289.21 161127.89 877.91 162005.80Less: Depreciation 64930.58 21629.73 86560.31 75068.79 29.29 75098.08

Net Block 90756.49 50972.41 141728.90 86059.10 848.62 86907.72Less: Unrealised Profit — 4575.43 4575.43 — 516.01 516.01Capital work-in-progress 10370.61 738.92 11109.53 18688.55 6875.47 25564.02

101127.10 47135.90 148263.00 104747.65 7208.08 111955.73Investments 5 56707.08 1373.22 58080.30 60427.97 2101.33 62529.30Current Assets, Loans and Advances: 6

Inventories 44154.26 12966.73 57120.99 43877.31 599.74 44477.05Sundry Debtors 33530.63 7717.66 41248.29 30082.99 141.90 30224.89Cash and Bank Balances 4741.14 934.60 5675.74 5606.13 141.02 5747.15Other Current Assets 3617.35 1587.62 5204.97 3685.68 127.76 3813.44Loans and Advances 20504.17 2126.77 22630.94 12632.81 172.69 12805.50

106547.55 25333.38 131880.93 95884.92 1183.11 97068.03

Less:Current Liabilities and Provisions: 7

Current Liabilities 37228.92 8040.36 45269.28 32901.55 741.69 33643.24Provisions 8635.51 1523.99 10159.50 7130.35 25.97 7156.32

45864.43 9564.35 55428.78 40031.90 767.66 40799.56

Net Current Assets 60683.12 15769.03 76452.15 55853.02 415.45 56268.47

TOTAL 218517.30 64278.15 282795.45 221028.64 9724.86 230753.50

Notes forming part of the Accounts 16As per our Report of even date GAUTAM HARI SINGHANIA

Chairman and Managing DirectorFor and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

!

63

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2007Consoli- Share in Total Consoli- Share in Total

dated with Joint Year dated with Joint YearSchedule subsidiaries Ventures ended subsidiaries Ventures ended

No. (Rs. in lacs) 31.03.2007 (Rs. in lacs) 31.03.2006INCOME

Sales, Services and Export Incentives 8 176122.16 27945.50 204067.66 170449.87 614.05 171063.92Other Income 9 9643.21 697.22 10340.43 8864.68 16.87 8881.55

185765.37 28642.72 214408.09 179314.55 630.92 179945.47EXPENDITURE

Material Costs 10 54274.52 12203.58 66478.10 55475.48 161.03 55636.51Manufacturing and Operating Costs 11 34570.71 8603.94 43174.65 34658.81 179.69 34838.50(Increase)/Decrease in finishedand process stock 12 (2784.64) (3539.42) (6324.06) (2732.44) (425.53) (3157.97)

Employment Costs 13 30532.99 6161.91 36694.90 27491.95 102.48 27594.43Administrative, Selling andGeneral expenses 14 38258.13 3220.26 41478.39 32163.97 88.95 32252.92

Finance Charges 15 5353.64 1560.92 6914.56 3861.35 41.74 3903.09Depreciation and Amortisation 8554.20 4019.77 12573.97 8728.13 10.11 8738.24Miscellaneous Expenditure written off — — — 8.16 0.06 8.22

168759.55 32230.96 200990.51 159655.41 158.53 159813.94Less: Stock transfer on divestment of

business/subsidiary (3468.26) 1734.13 (1734.13) (1313.64) 593.91 (719.73)Less: Trial Run Expenditure capitalised (116.29) (226.46) (342.75) (78.86) — (78.86)

165175.00 33738.63 198913.63 158262.91 752.44 159015.35PROFIT FOR THE YEAR BEFOREEXCEPTIONAL ITEMS 20590.37 (5095.91) 15494.46 21051.64 (121.52) 20930.12

Add/(Less): EXCEPTIONAL ITEMS (Refer Note 6) 3871.93 — 3871.93 (538.25) — (538.25)PROFIT FOR THE YEAR BEFORE TAX 24462.30 (5095.91) 19366.39 20513.39 (121.52) 20391.87

Provision for Income Tax :- Current Tax 6040.21 14.20 6054.41 4782.72 — 4782.72- Deferred Tax (831.56) (127.63) (959.19) 842.19 — 842.19- Fringe Benefits Tax 349.12 14.20 363.32 437.23 0.48 437.71Provision for Wealth Tax 29.16 2.40 31.56 34.84 — 34.84

PROFIT FOR THE YEAR AFTER TAX 18875.37 (4999.08) 13876.29 14416.41 (122.00) 14294.41Add/(Less): Share of profit inAssociate Companies 280.72 — 280.72 75.82 — 75.82

Minority Interest (84.73) — (84.73) (500.49) — (500.49)Pre-acquisition Loss/(Profit) (173.24) — (173.24) (92.82) — (92.82)

18898.12 (4999.08) 13899.04 13898.92 (122.00) 13776.92Add/(Less): Prior period adjustments (net)(Refer Note 5) 83.72 0.12 83.84 (151.74) — (151.74)Excess/(Short) provision for tax 15.90 (0.07) 15.83 (16.07) — (16.07)Balance brought forward 17836.56 (122.00) 17714.56 10180.50 — 10180.50

BALANCE AVAILABLE FOR APPROPRIATION 36834.30 (5121.03) 31713.27 23911.61 (122.00) 23789.61APPROPRIATION:

Debenture Redemption Reserve 1450.00 — 1450.00 1275.00 — 1275.00Legal Reserve — 0.58 0.58 — — -General Reserve 4000.00 — 4000.00 1210.05 — 1210.05Share of Retained Earnings inAssociate Companies 268.25 — 268.25 69.94 — 69.94

Proposed dividend 3069.04 — 3069.04 3069.04 — 3069.04Tax on proposed dividend 521.58 — 521.58 445.14 — 445.14Share of tax on dividend of Associates 12.47 — 12.47 5.88 — 5.88

9321.34 0.58 9321.92 6075.05 — 6075.05

Balance carried to Balance Sheet 27512.96 (5121.61) 22391.35 17836.56 (122.00) 17714.56

Weighted average number of Equity Sharesoutstanding during the year 6,13,80,853 6,13,80,853

Basic and diluted earnings per shareincluding exceptional items (in Rs.) 22.78 22.16

Basic and diluted earnings per shareexcluding exceptional items(net of tax) (in Rs.) 14.38 22.26

Notes forming part of the Accounts 16

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

!

64

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2007

Year Ended Year Ended31st March, 2007 31st March, 2006

(Rs. in lacs) (Rs. in lacs)

A. Cash Flow arising from Operating Activities:Net Profit before Tax and Exceptional Items as per Profit and Loss Account 15494.46 20930.12Add/(Deduct):a) Provision for Doubtful Debts, Advances and claims 93.65 367.11b) Preliminary Expenses written off — 0.76c) Goodwill written off — (0.08)d) Revaluation Reserve (39.36) —e) Investment Grant (3.45) —f) Provision for Diminution in value of Investments 140.28 —g) Depreciation and Amortisation Charge 12573.97 8738.24h) Finance Charges and (Gain)/Loss on variation in Foreign Exchange rates 5680.29 3924.57i) Loss /(Profit )on Sale of Assets 246.45 (68.10)j) Interest Income (1897.54) (1405.06)k) Dividend Income (1242.17) (1637.70)l) Provision no longer required — (28.23)m) Surplus on sale of Investments (3725.58) (3936.15)

11826.54 5955.36

Operating Cash Profit before Working Capital Changes 27321.00 26885.48Add/(Deduct):a) Increase/(Decrease) in Trade Payable 13104.28 7688.90b) (Increase)/Decrease in Trade and Other Receivables (17476.34) (5807.27)c) (Increase)/Decrease in Inventories (12643.92) (7355.35)

(17015.98) (5473.72)

Cash Inflow from Operations 10305.02 21411.76Deduct:Direct Taxes paid 5727.93 4679.83

Cash Inflow before Prior Period Adjustments 4577.09 16731.93Deduct: Prior Period adjustments 74.57 (153.40)

Net Cash Inflow in the course of Operating Activities 4651.66 16578.53Deduct: Voluntary Retirement Compensation 684.68 888.31

Net Cash Inflow in the course of Operating Activities after Exceptional Items 3966.98 15690.22

B. Cash Flow arising from Investing Activities:Inflow:a) Sale of Fixed Assets 31615.76 3842.81b) Interest Received 2392.56 398.25c) Proceeds from divestment of business — 1250.08d) Dividend Received 1459.19 1414.16e) Sale of Investments 8302.62 7234.20

43770.13 14139.50Outflow:a) Acquisition of Fixed Assets 69053.54 50727.29b) Acquisition of Subsidiary/Minority Interest 2885.08 2617.20c) Loans to Companies 3664.39 268.56

75603.01 53613.05

Net Cash (Outflow) in the course of Investing Activities (31832.88) (39473.56)

C. Cash Flow arising from Financing Activities:Inflow:a) Proceeds from Term Loans 15289.21 25311.18b) Proceeds from other borrowings 24364.34 5393.13c) Proceeds from Debentures (Net) 700.00 100.00

40353.55 30804.31Outflow:a) Finance Charges (Net) 9120.41 3591.37b) Dividend paid 3055.89 2445.65c) Tax on dividend 445.14 320.87

12621.44 6357.89

Net Cash Inflow in the course of Financing Activities 27732.11 24446.42

D. Change in Currency Fluctuation Reserve arising on consolidation 62.38 (155.58)

Net Increase/(Decrease) in Cash/Cash Equivalents (A+B+C+D) (71.41) 507.50Add: Balance at the beginning of the year 5747.15 4936.34Add: Cash/Cash Equivalent balance-Acquisition/Disposal of subsidiaries (Net) – 303.31Cash/Cash Equivalents at the close of the year 5675.74 5747.15

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

!

65

SCHEDULES ‘1’ TO ‘16’ FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED31ST MARCH, 2007

Consolidated Share in Total as at Consolidated Share in Total as at with Joint 31.03.2007 with Joint 31.03.2006

subsidiaries Ventures subsidiaries Ventures(Rs. in lacs) (Rs. in lacs)

SCHEDULE 2 — RESERVES AND SURPLUS

(a) Capital Reserve — 25.77 25.77 — 24.99 24.99

(b) Legal Reserve:Balance as per last account 8.04 — 8.04 8.04 — 8.04

Add: Transfer from Profit and Loss Account — 0.58 0.58 — — —

8.04 0.58 8.62 8.04 — 8.04

(c) Securities Premium AccountBalance as per last account 14778.55 — 14778.55 14778.55 — 14778.55

Addition during the year — 4358.53 4358.53 — — —

14778.55 4358.53 19137.08 14778.55 — 14778.55

(d) Capital Redemption ReserveBalance as per last account 1521.51 — 1521.51 1521.51 — 1521.51

(e) Debenture Redemption Reserve:Balance as per last account 1275.00 — 1275.00 750.00 — 750.00

Add: Transfer from Profit and Loss Account 1450.00 — 1450.00 1275.00 — 1275.00

2725.00 — 2725.00 2025.00 — 2025.00

Less: Transfer to General Reserve (1275.00) — (1275.00) (750.00) — (750.00)

1450.00 — 1450.00 1275.00 — 1275.00

(f) General Reserve:Balance as per last account 83389.86 — 83389.86 81429.81 — 81429.81

Add:1) Transfer from Debenture Redemption

Reserve 1275.00 — 1275.00 750.00 — 750.00

2) Opening Leave liablity (32.20) — (32.20) — — —

3) Transfer from Profit and Loss Account 4000.00 — 4000.00 1210.05 — 1210.05

88632.66 — 88632.66 83389.86 — 83389.86

(g) Revaluation ReserveAdditions During the year — 1374.63 1374.63 — — —

Less : Transfer to Profit & Loss Account — (39.36) (39.36) — — —

— 1335.27 1335.27 — — —

(h) Investments GrantsAdditions During the year — 21.96 21.96 — — —

Less : Transfer to Profit & Loss Account — (3.45) (3.45) — — —

— 18.51 18.51 — — —

(i) Currency Fluctuation Reserve — on Consolidation 736.26 (99.91) 636.35 573.96 — 573.96

(j) Share of Retained Earnings in Associates:Balance as per last account 1950.84 — 1950.84 1918.36 — 1918.36

Less: Exchange Fluctuation on Opening Retained Earnings (12.40) — (12.40) (37.46) — (37.46)

Add/(Less): Transfer from Profit and Loss Account 268.25 — 268.25 69.94 — 69.94

2206.69 — 2206.69 1950.84 — 1950.84

(k) Profit and Loss Account 27512.96 (5121.61) 22391.35 17836.56 (122.00) 17714.56

Total Reserves and Surplus — Per Balance Sheet 136846.67 517.14 137363.81 121334.32 (97.01) 121237.31

SCHEDULE 1 - SHARE CAPITAL Total as at Total as at31.03.2007 31.03.2006

(Rs. in Lacs) (Rs. in Lacs)

Authorised:10,00,00,000 Equity Shares of Rs.10 each 10000.00 10000.00

10000.00 10000.00

Issued and Subscribed :6,13,80,853 Equity Shares of Rs.10 each, fully paid-up 6138.08 6138.08

Per Balance Sheet 6138.08 6138.08

66

SCHEDULE 3 - LOAN FUNDS

(a) Secured Loans:

Debentures:58 (Previous year 51) Privately Placed Non-ConvertibleDebentures of Rs.1,00,00,000 each with daily put/call option(interest linked with MIBOR) which have been since redeemed 5800.00 — 5800.00 5100.00 — 5100.00

Term Loans:Term Loans from Banks 41012.15 26505.95 67518.10 47253.21 5030.50 52283.71Interest accrued thereon 79.21 6.42 85.63 25.38 5.42 30.80

41091.36 26512.37 67603.73 47278.59 5035.92 52314.51Working capital loans from banks 23589.74 6913.12 30502.86 12682.86 340.37 13023.23Interest accrued thereon 27.63 — 27.63 5.02 1.02 6.04

23617.37 6913.12 30530.49 12687.88 341.39 13029.27Buyer’s credit Loan 780.13 — 780.13 775.07 — 775.07Hire purchase loans 1.98 — 1.98 8.44 — 8.44

Total - Secured Loans 71290.84 33425.49 104716.33 65849.98 5377.31 71227.29

(b) Unsecured Loans:

Foreign Currency Loans from Banks 21566.44 — 21566.44 21338.13 — 21338.13From Joint Venture Partners (Long Term) — 4123.87 4123.87 — — —Short Term Borrowings:Buyer’s Credit Loan — — — 140.11 — 140.11From Banks 4.03 — 4.03 5.24 — 5.24

4.03 — 4.03 145.35 — 145.35Other Borrowings:Sales Tax Deferment Loan 1280.10 — 1280.10 1262.41 — 1262.41Others — 328.10 328.10 — 150.00 150.00

1280.10 328.10 1608.20 1262.41 150.00 1412.41Total - Unsecured Loans 22850.57 4451.97 27302.54 22745.89 150.00 22895.89

Total Loan Funds - Per Balance Sheet 94141.41 37877.46 132018.87 88595.87 5527.31 94123.18

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006subsidiaries Ventures subsidiaries Ventures

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 4 - FIXED ASSETS (NET BLOCK)

A. AssetsGoodwill on Consolidation 897.58 9142.65 10040.23 — — —

Land -

Freehold 3839.92 735.43 4575.35 2729.02 — 2729.02

Leasehold 554.83 1731.15 2285.98 692.71 94.76 787.47

Buildings 15729.02 10210.59 25939.61 15543.55 317.96 15861.51

Improvements to Leasehold Premises 1439.85 66.30 1506.15 455.25 — 455.25

Plant and Machinery, Electrical Installations and Equipments 54636.52 28313.80 82950.32 60307.10 433.18 60740.28

Furniture, Fixtures and Office Equipments 2494.29 338.87 2833.16 1830.45 2.72 1833.17

Livestock (at book value) 15.78 — 15.78 16.19 — 16.19

Vehicles 977.44 125.02 1102.46 1038.94 — 1038.94

Boats and Water Equipments 216.74 — 216.74 270.29 — 270.29

Aircraft 9068.87 — 9068.87 3006.37 — 3006.37

Intangible Assets :Software 863.67 8.28 871.95 76.94 — 76.94

Trade Mark — — — 0.35 — 0.35

Leasing and other similar rights — 300.32 300.32 — — —

Technical Knowhow 21.98 — 21.98 91.94 — 91.94

Per Balance Sheet 90756.49 50972.41 141728.90 86059.10 848.62 86907.72

Less : Unrealised Profit — 4575.43 4575.43 — 516.01 516.01

90756.49 46396.98 137153.47 86059.10 332.61 86391.71

B. Capital work-in-progress 10370.61 738.92 11109.53 18688.55 6875.47 25564.02

67

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006subsidiaries Ventures subsidiaries Ventures

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 5 - INVESTMENTS (AT COST/BOOK VALUE)(fully paid up unless otherwise specified)

I. LONG TERM INVESTMENTS

A. Investments in Government Securities 0.10 0.10 0.20 0.04 0.10 0.14

B. Non-Trade Investments

Shares (Unquoted). 827.35 — 827.35 885.51 — 885.51

Less: Provision for diminution in value of Investments (300.38) — (300.38) (350.09) — (350.09)

526.97 — 526.97 535.42 — 535.42

C. Non-Trade Investments

Shares (Quoted) 2343.27 — 2343.27 2078.97 — 2078.97

Bonds (Quoted) 2974.96 — 2974.96 2974.96 — 2974.96

5318.23 — 5318.23 5053.93 — 5053.93

D. Non-Trade Investments

Unquoted Debentures 42.19 — 42.19 1036.19 — 1036.19

Less: Provision for diminution in value of Investments — — — (994.00) — (994.00)

42.19 — 42.19 42.19 — 42.19

E. Mutual Fund (Unquoted):

Investment in mutual fund-FMP (Growth) 16158.00 366.38 16524.38 8000.00 — 8000.00

F. Venture Capital Funds

Investments in Venture Capital Funds 2482.94 — 2482.94 1150.00 — 1150.00

(Includes units of Rs.500 lacs,Rs.250 lacs paid up)

G. Others 9043.14 — 9043.14 1686.35 — 1686.35

Total - Long Term Investments 33571.57 366.48 33938.05 16467.93 0.10 16468.03

II. CURRENT INVESTMENTSA. Dividend Option Units 9083.27 927.75 10011.02 17427.78 — 17427.78

B. Growth Option Units 1235.68 78.99 1314.67 3607.87 2101.23 5709.10

C. Fixed Maturity Plan Units 7000.00 — 7000.00 15800.00 — 15800.00

D. Equity Shares (Quoted) 6093.49 — 6093.49 7261.04 — 7261.04

23412.44 1006.74 24419.18 44096.69 2101.23 46197.92Less: Provision for diminution in value of Current Investments (276.93) — (276.93) (136.65) — (136.65)

Total - Current Investments 23135.51 1006.74 24142.25 43960.04 2101.23 46061.27

Total - Investments - Per Balance Sheet 56707.08 1373.22 58080.30 60427.97 2101.33 62529.30

Book ValueAggregate of Quoted Investments 11134.79 — 11134.79 12178.32 — 12178.32

Aggregate of Unquoted Investments 45572.29 1373.22 46945.51 48249.65 2101.33 50350.98

56707.08 1373.22 58080.30 60427.97 2101.33 62529.30

Market ValueAggregate of Quoted Investments 15011.88 — 15011.88 16459.85 — 16459.85

SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES

(a) Inventories:

(As verified, valued and certified by the Management):

(i) Loose Tools 84.75 — 84.75 84.75 — 84.75

(ii) Stores and Spare Parts 2024.18 1244.26 3268.44 2961.52 18.88 2980.40

(iii) Stock-in-Trade:

Raw Materials 10123.94 3364.04 13487.98 11276.23 143.31 11419.54

Goods-in-Process 10605.47 2133.68 12739.15 11246.20 204.38 11450.58

Finished Goods (including Merchanting Goods) 19227.93 6059.11 25287.04 15801.60 221.15 16022.75

(iv) Accumulated cost on conversion contracts 60.10 — 60.10 49.49 — 49.49

(v) Goods-in-Transit 2027.89 165.64 2193.53 2457.52 12.02 2469.54

44154.26 12966.73 57120.99 43877.31 599.74 44477.05

68

SCHEDULE 6 - CURRENT ASSETS, LOANS AND ADVANCES (Contd.)

(b) Sundry Debtors :

(i) Debts outstanding for a period exceeding six months(Refer Note 3)

Secured (considered good) 158.31 2.10 160.41 118.83 — 118.83Unsecured -

Considered good 1906.00 78.76 1984.76 1404.53 — 1404.53

2064.31 80.86 2145.17 1523.36 — 1523.36

Considered doubtful 387.90 196.49 584.39 651.05 — 651.05

Less: Provision (387.90) (180.64) (568.54) (651.05) — (651.05)

— 15.85 15.85 — — —

(ii) Other Debts :

Secured (considered good) 2737.99 3.47 2741.46 2383.30 8.15 2391.45Unsecured -

Considered good 28728.33 7617.48 36345.81 26176.33 133.75 26310.08

31466.32 7620.95 39087.27 28559.63 141.90 28701.53

33530.63 7717.66 41248.29 30082.99 141.90 30224.89

(c) Cash and Bank Balances:

(i) Cash on hand (including cheques on hand) 1290.81 334.54 1625.35 327.30 0.97 328.27

(ii) Balances with Banks:

In Current Accounts (including remittances-in-transit) 2237.38 300.34 2537.72 3440.59 140.00 3580.59

In Deposit Accounts 1212.95 299.72 1512.67 1838.24 0.05 1838.29

4741.14 934.60 5675.74 5606.13 141.02 5747.15

(d) Other Current Assets:

(i) Export Incentives, etc. receivable 542.38 261.91 804.29 984.12 3.90 988.02

(ii) Dividend, Interest Subsidy and Interest receivable[including interest accrued on Investments Rs. 391.08 lacs(Previous year Rs.88.06 lacs)] 2094.97 689.51 2784.48 1312.84 60.37 1373.21

(iii) Claims and Other receivables [Net of provision fordoubtful claims Rs.7.38 lacs (Previous year Rs.75.24 lacs)] 980.00 636.20 1616.20 1388.72 63.49 1452.21

3617.35 1587.62 5204.97 3685.68 127.76 3813.44

(e) Loans and Advances

(Unsecured, considered good, unless otherwise specified):

Loans and Advances to companies and others:

Considered good 3716.16 278.23 3994.39 330.00 — 330.00

Considered doubtful 32.00 — 32.00 97.68 — 97.68

Less: Provision (32.00) — (32.00) (97.68) — (97.68)

3716.16 278.23 3994.39 330.00 — 330.00

Advances recoverable in cash or in kind or for valueto be received:

Considered good 8190.01 1510.99 9701.00 5836.58 157.75 5994.33

Considered doubtful 13.15 — 13.15 106.62 — 106.62

Less: Provision (13.15) — (13.15) (106.62) — (106.62)

8190.01 1510.99 9701.00 5836.58 157.75 5994.33

Balances with —

Customs, Excise, etc. 479.91 1.25 481.16 270.03 — 270.03

Others 8118.09 336.30 8454.39 6196.20 14.94 6211.14

8598.00 337.55 8935.55 6466.23 14.94 6481.17

20504.17 2126.77 22630.94 12632.81 172.69 12805.50

Per Balance Sheet 106547.55 25333.38 131880.93 95884.92 1183.11 97068.03

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006subsidiaries Ventures subsidiaries Ventures

(Rs. in lacs) (Rs. in lacs)

69

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006subsidiaries Ventures subsidiaries Ventures

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities :

Acceptances 338.97 — 338.97 282.51 — 282.51Sundry Creditors 24477.30 7143.83 31621.13 21995.47 680.45 22675.92Advances against Sales 898.65 47.52 946.17 596.80 15.95 612.75Deposits from Dealers and Agents 5863.64 20.32 5883.96 5549.98 19.78 5569.76Overdrawn Bank Balances 2327.61 121.82 2449.43 1149.41 — 1149.41Other Liabilities 3135.74 505.05 3640.79 2786.15 25.51 2811.66Interest accrued but not due 187.01 201.82 388.83 541.23 — 541.23

37228.92 8040.36 45269.28 32901.55 741.69 33643.24(b) Provisions :

For Proposed Dividend 3069.04 — 3069.04 3069.04 — 3069.04For Tax on Proposed Dividend 521.58 — 521.58 445.14 — 445.14For Taxation (Net of Advance Tax) 268.70 88.59 357.29 (350.15) 1.91 (348.24)For Retirement Benefits 3680.67 803.28 4483.95 2702.50 11.55 2714.05For Excise Duties 223.02 51.09 274.11 338.12 — 338.12Others 872.50 581.03 1453.53 925.70 12.51 938.21

8635.51 1523.99 10159.50 7130.35 25.97 7156.32

Per Balance Sheet 45864.43 9564.35 55428.78 40031.90 767.66 40799.56

SCHEDULE 8 - SALES, SERVICES AND EXPORT INCENTIVES(1) Gross Turnover (Net of usual trade discounts, allowances, etc.):

(a) Manufactured Goods (inclusive of sale ofsemi-finished goods) 167859.26 27357.44 195216.70 163900.77 615.54 164516.31

(b) Merchanting Goods 11096.00 65.21 11161.21 9284.20 — 9284.20

178955.26 27422.65 206377.91 173184.97 615.54 173800.51Less:Excise Duties 2316.24 362.16 2678.40 2413.78 — 2413.78Sales Returns 690.13 188.73 878.86 754.80 2.33 757.13Other discounts and allowances 3638.61 117.51 3756.12 2335.82 3.06 2338.88

6644.98 668.40 7313.38 5504.40 5.39 5509.79

Net Turnover 172310.28 26754.25 199064.53 167680.57 610.15 168290.72(2) Commission 75.52 — 75.52 100.41 — 100.41(3) Income from Air Taxi Operations 894.33 — 894.33 348.01 — 348.01(4) Gross Income from Services 298.72 827.25 1125.97 183.08 — 183.08(5) Income from Job work 1092.12 — 1092.12 535.93 — 535.93(6) Conducting Fees 291.94 — 291.94 — — —(7) Export Incentives, etc. 1159.25 364.00 1523.25 1601.87 3.90 1605.77

Per Profit and Loss Account 176122.16 27945.50 204067.66 170449.87 614.05 171063.92

SCHEDULE 9 - OTHER INCOMEDividends:

From Non-Trade Investments:— Current Investments 1198.06 5.41 1203.47 1614.99 — 1614.99— Long Term Investments 38.70 — 38.70 22.71 — 22.71

1236.76 5.41 1242.17 1637.70 — 1637.70Interest Income:

— On Investments 473.70 21.86 495.56 163.47 — 163.47— Others 1399.67 2.31 1401.98 1238.70 2.89 1241.59

1873.37 24.17 1897.54 1402.17 2.89 1405.06Gain on variation in Foreign Exchange rates(Net):

— On Loans 953.37 280.90 1234.27 (22.06) 0.58 (21.48)— On Others (643.87) 46.86 (597.01) (691.00) 0.22 (690.78)

309.50 327.76 637.26 (713.06) 0.80 (712.26)Profit on sale of Current Investments (Net) 3529.05 75.52 3604.57 3872.98 5.86 3878.84Profit on sale of Long-term Investments (Net) 121.01 — 121.01 57.31 — 57.31Rent and Compensation 101.92 — 101.92 38.00 — 38.00Credit Balances appropriated (Net) 19.13 — 19.13 9.36 — 9.36Excess provisions written back (Net) 638.87 — 638.87 364.65 1.89 366.54Insurance Claim Received — 15.23 15.23 1046.16 — 1046.16Sales Tax Refund 456.10 — 456.10 — — —Miscellaneous Income 1357.50 249.13 1606.63 1149.41 5.43 1154.84

Per Profit and Loss Account 9643.21 697.22 10340.43 8864.68 16.87 8881.55

SCHEDULE 10 - MATERIAL COSTS(1) Raw Materials consumed :

Opening Stock 11276.23 143.31 11419.54 9286.26 — 9286.26Add: Arising on acquisition of business — 3392.83 3392.83 403.13 — 403.13Add: Purchases 47712.04 11740.55 59452.59 52533.07 242.28 52775.35

(Includes Purchase of Semi Finished Goods) 58988.27 15276.69 74264.96 62222.46 242.28 62464.74Less: Loss by flood — — — 869.98 — 869.98Less: Transfer on divestment of business 2949.17 — 2949.17 124.11 (62.06) 62.05Less: Sales 1557.46 12.21 1569.67 668.34 — 668.34

54481.64 15264.48 69746.12 60560.03 304.34 60864.37Less: Closing Stock 10123.94 3364.04 13487.98 11276.23 143.31 11419.54

44357.70 11900.44 56258.14 49283.80 161.03 49444.83(2) Purchases of Merchanting Goods 9916.82 303.14 10219.96 6191.68 — 6191.68

Per Profit and Loss Account 54274.52 12203.58 66478.10 55475.48 161.03 55636.51

70

Consoli- Share in Total as at Consoli- Share in Total as atdated with Joint 31.03.2007 dated with Joint 31.03.2006subsidiaries Ventures subsidiaries Ventures

(Rs. in lacs) (Rs. in lacs)

SCHEDULE 11 - MANUFACTURING AND OPERATING COSTS

Stores and Spare Parts 12241.70 4210.57 16452.27 14032.47 89.43 14121.90Power and Fuel 10047.10 3016.19 13063.29 10691.53 69.05 10760.58Repairs to Buildings 778.25 106.96 885.21 546.08 3.60 549.68Repairs to Machinery 1738.06 452.20 2190.26 1943.70 6.74 1950.44Other Manufacturing and Operating Expenses 9765.60 818.02 10583.62 7445.03 10.87 7455.90

Per Profit and Loss Account 34570.71 8603.94 43174.65 34658.81 179.69 34838.50

SCHEDULE 12 - (INCREASE)/DECREASE IN FINISHED AND PROCESS STOCK

Opening Stock:Goods-in-Process * 11246.20 537.30 11783.50 10173.76 — 10173.76Arising on acquisition of Subsidiary — — — 287.55 — 287.55Accumulated cost on conversion contracts 49.49 — 49.49 18.73 — 18.73Finished Goods (including Merchanting Goods) * 15801.60 4114.30 19915.90 13873.42 — 13873.42

27097.29 4651.60 31748.89 24353.46 — 24353.46Closing Stock:

Goods-in-Process 10605.47 2133.68 12739.15 11246.20 204.38 11450.58Finished Goods (including Merchanting Goods) 19227.93 6059.11 25287.04 15801.60 221.15 16022.75Accumulated cost on conversion contracts 60.10 — 60.10 49.49 — 49.49

29893.50 8192.79 38086.29 27097.29 425.53 27522.82(Increase)/Decrease in Stocks (2796.21) (3541.19) (6337.40) (2743.83) (425.53) (3169.36)Add/(Less): Variation in excise duty on opening andclosing stock of finished goods 11.57 1.77 13.34 11.39 — 11.39

Per Profit and Loss Account (2784.64) (3539.42) (6324.06) (2732.44) (425.53) (3157.97)

* Includes stocks of New Joint Venture entered during the year.

SCHEDULE 13 - EMPLOYMENT COSTS

Salaries, Wages, Bonus, etc. 27032.60 4435.25 31467.85 24188.59 89.02 24277.61Contribution to Provident and Other Funds 1991.19 1346.55 3337.74 1838.25 8.33 1846.58Workmen and Staff Welfare Expenses 1509.20 380.11 1889.31 1465.11 5.13 1470.24

Per Profit and Loss Account 30532.99 6161.91 36694.90 27491.95 102.48 27594.43

SCHEDULE 14 - ADMINISTRATIVE, SELLING AND GENERAL EXPENSES

Insurance (Net) 631.87 180.09 811.96 659.58 2.23 661.81Rent 4069.75 52.16 4121.91 2118.15 — 2118.15Lease Rentals 19.55 — 19.55 23.12 — 23.12Rates and Taxes 183.95 58.76 242.71 209.75 0.32 210.07Advertisement 9921.47 4.36 9925.83 8206.62 — 8206.62Commission to Selling Agents 4881.38 472.87 5354.25 4602.00 11.55 4613.55Freight, Octroi, etc. 2448.11 738.89 3187.00 2728.38 8.91 2737.29Bad Debts, Advances and Claims written off 36.49 — 36.49 86.91 — 86.91Provision for Doubtful Debts, Advances and Claims 15.00 42.16 57.16 280.20 — 280.20Miscellaneous Expenses 15451.19 1817.70 17268.89 13222.40 65.94 13288.34Loss on sale of fixed assets 393.18 (146.73) 246.45 (68.10) — (68.10)Provision for diminution in value of Investments 140.28 — 140.28 — — —Contribution to Charitable Funds, etc. 57.01 — 57.01 87.66 — 87.66Directors’ fees 8.90 — 8.90 7.30 — 7.30

Per Profit and Loss Account 38258.13 3220.26 41478.39 32163.97 88.95 32252.92

SCHEDULE 15 - FINANCE CHARGES

Interest on Debentures and Fixed Loans 3601.65 1007.24 4608.89 2474.87 50.00 2524.87Interest - Others 1658.91 522.04 2180.95 1356.21 12.90 1369.11

5260.56 1529.28 6789.84 3831.08 62.90 3893.98Discount on issue of “Commercial Papers” — — — 15.43 — 15.43Commitment and other charges on Loans 220.86 158.71 379.57 110.25 25.76 136.01

5481.42 1687.99 7169.41 3956.76 88.66 4045.42Less: Borrowing Costs Capitalised 127.78 127.07 254.85 95.41 46.92 142.33

Per Profit and Loss Account 5353.64 1560.92 6914.56 3861.35 41.74 3903.09

71

SCHEDULE 16 - NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS

1. The consolidated Financial Statements present the consolidated Accountsof Raymond Limited with its following Subsidiaries, Joint Ventures (and itssubsidiaries), Associates, Subsidiary and Joint Venture of an Associate:

Name Country of Proportion ofIncorporation Ownership

Interest

A. Subsidiaries

Indian Subsidiaries:

(a) Raymond Apparel Limited India 100%

(b) Pashmina Holdings Limited India 100%

(c) Everblue Apparel Limited India 100%

(d) Hindustan Files Limited India 100%

(e) Colorplus Fashions Limited India *100%

(f) Silver Spark Apparel Limited India 100%

(g) Celebrations Apparel Limited India 100%

(h) Scissors Engineering Products Limited India 100%

(i) Ring Plus Aqua Limited India $87.32%

(j) JK Talabot Limited India 90%

* Held by Raymond Apparel Limited$ Held by Scissors Engineering Products Limited

Foreign Subsidiaries:

(a) Jaykayorg AG Switzerland 100%

(b) J.K. (England) Limited United Kingdom 100%

(c) Regency Texteis Portuguesa, Limitada Portugal 100%

(d) R&A Logistics Inc. United States 100% ownedof America by Ring Plus

Aqua Limited(e) Raymond Europe, SRL Italy 60%

B. Joint Ventures:

(a) Raymond Fedora Private Limited India 50%

(b) Raymond Zambaiti Private Limited India 50%

(c) Raymond UCO Denim Private Limited(and its subsidiaries ) India 50%

(d) GAS Apparel Private Limited India @50%

(e) Rose Preci - Form Pvt. Ltd. India &50%

@Held by Color Plus Fashions Limited ( Wholly owned subsidiary of RaymondApparel Limited)

& Held by Ring Plus Aqua Limited ( Subsidiary of Scissors EngineeringProducts Limited )

C. Associates, Subsidiary and Joint Venture of an Associate:

(a) P. T. Jaykay Files Indonesia Indonesia $39.20%

(b) J.K. Investo Trade (India) Limited India 47.66%

(c) J.K. Helene Curtis Limited India 100% ownedby J.K.InvestoTrade (India)Limited

(d) J.K. Ansell Limited India Joint Venturewith 50%ownership byJ.K. InvestoTrade (India)Limited

(e) Radha Krshna Films Limited India 29.41%

$ Includes 15.20% equity shares held by Jaykayorg AG.

2. Significant Accounting Policies and Notes to these Consolidated FinancialStatements are intended to serve as a means of informative disclosure anda guide to better understanding the consolidated position of the Companies.Recognising this purpose, the Company has disclosed only such Policies andNotes from the individual financial statements, which fairly present theneeded disclosures.

3. Sundry Debtors, considered good includes Rs.36.70 lacs for which theCompany has initiated legal action (Previous year Rs.39.43 lacs).

4. A. Contingent Liabilities not provided for:31st March, 31st March,

2007 2006(Rs. in lacs) (Rs. in lacs)

(a) Claims against the Company notacknowledged as debts in respectof past disputed liabilities of theCement and Steel Divisionsdivested during the year 2000-2001,Carded Woollen business divestedduring the year 2005-2006 andDenim Division divested during thecurrent year. (interest thereon notascertainable at present). 3984.32 3938.76

(b) Claims against the Companies notacknowledged as debts (includingshare of Joint Ventures Rs.21.77lacs; Previous Year Rs.21.77 lacs) 2273.09 2306.29

(c) Bills Discounted with theCompany’s bankers.(including share of Joint VenturesRs.2147.82 lacs Previous Year Rs. Nil.) 7398.64 4953.04

(d) On account of guarantees givenand also on account of theindemnities issued by the Companyto the Acquirer of shares of RecronSynthetics Limited pursuant to anagreement. 342.70 342.70

(e) Disputed demand in respect ofIncome-tax etc. (interest thereonnot ascertainable at present.) 6549.32 7583.89

(f) Bonds/Undertakings given by theCompany under concessionalduty/exemption scheme toCustoms authorities (includingshare of Joint Ventures Rs.2432.58lacs Previous year Rs. 2433.83 lacs.) 14999.95 9845.06

(g) Disputed liability towards ExciseDuty on Post Removal of Goodsfrom the place of manufacture. 2118.90 2118.90

(h) Disputed Excise Duty Liability inrespect of other matters. 2274.02 3747.45

(i) Liabil ity on account of jutepackaging obligation upto 30thJune, 1997, in respect of theCompany’s erstwhile CementDivision, under the Jute PackagingMaterials (Compulsory use inpacking Commodities) Act, 1987. Amount not determinable

(j) Liability in respect of additionalstamp duty on the transfer ofimmovable properties of theCompany’s erstwhile CementDivision. Amount not determinable

(k) Guarantees issued by the Bankers 59.08 54.12

(l) Company’s liabilities/obligationspertaining to the period upto thedate of transfer of the Company’serstwhile Steel, Cement, CardedWoollen and Denim Divisions inrespect of which the Company hasgiven to the acquirers:

72

- Bank Guarantee 210.00 380.00

- Undertakings Amount not determinable

(m) Share in the Contingent Liabilitiesof an Associate 724.17 699.45

(n) Liability on account of sales taxmatter of an Ex-Franchisee. Amount not determinable

B. The wage agreements in respect of theunionised employees of the Company’sFi les & Tools Divis ion situated atPithampur has expired during financialyear 2005-06. Liability on account ofwage revision will be accounted in theyear of finalisation of the wageagreement.

C. Estimated amount of contractsremaining to be executed on capitalaccount and not provided for (net ofadvances) [including Rs .1.03 lacs(Previous year Rs.Nil ) being share in anAssociate Company] [including shareof Joint Ventures Rs.138.95 lacs 3445.96 6125.29(Previous Year Rs. 1106.08 lacs)]

Year ended Year ended31st March, 31st March,

2007 2006(Rs. in lacs) (Rs. in lacs)

5. Prior period adjustments represent:

Debits relating to earlier years 74.49 191.12

Credits relating to earlier years (149.05) (41.04)

Depreciation/Amortisation adjustments(net) (9.28) 1.66

(83.84) 151.74

6. Exceptional Items:

(a) Net surplus on divestment of CardedWoollen business as a going concern(net of Unrealised Profit of Joint Venture) — 464.18

(b) VRS payments written off (684.68) (888.31)

(c) Textiles Regency, Sociedad Limitada (Net)

- Sale of Brand Equity — 134.78

- Less: Loss on divestment — 4.40

— 130.38

(d) Discount on pre-payment of Sales taxDeferment Loan — 147.04

(e) Plugin Sales Limited (Net)

- Extinguishment of losses ondivestment of Subsidiary — 894.56

- Less: Provision for diminution invalue of Debentures — 994.00

— (99.44)

(f) Goodwill on consolidation (ReferNote 10) — (273.88)

(g) Provision for diminution in value ofInvestment in an Associate — (18.22)

(h) Net surplus on divestment of Denimbusiness as a going concern (net ofUnrealised Profit of Joint Venture) 4,404.66 —

(i) Reversal of Impairment (Refer Note 17) 151.95 —

3871.93 (538.25)

7 Goodwill amounting to Rs. 11155.81 lacs (Previous year Rs.273.88 lacs) hasarisen on consolidation of accounts between Raymond Limited and its

subsidiaries and joint ventures. Such Goodwill represents excess of cost of itsinvestments over its share of equity on the date of acquisition. (Refer Note10)

8. Deferred Tax:As at As at As at

31-3-2007 31-3-2006 31-3-2005(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

(a) Deferred Tax Liability onaccount of:

Depreciation 11056.10 10340.61 7339.84

Others 478.70 - -

11534.80 10340.61 7339.84

(b) Deferred Tax Asset onaccount of:

(i) VRS payments 706.61 749.98 689.76

(ii) Employee benefits 870.50 590.43 481.48

(iii) Taxes, Duties, Cess, etc. 206.57 202.69 5.78

(iv) Provision for doubtfuldebts, etc. 158.49 242.64 218.61

(v) Provision for diminutionin value of investments 2.91 225.93 2.88

(vi) Obsolescence/discardand impairment of assets - 105.55 -

(vii) Unabsorbed depreciationand losses * 2,892.04 1,177.74 -

(viii) Others 27.59 25.12 361.26

4,864.71 3,320.08 1,759.77

Deferred Tax (Net) 6,670.09 7,020.53 5,580.07

* As a matter of prudence, unabsorbed depreciation and losses have beenrecognised only to the extent there is Deferred Tax Liability.

9 Variation between the Accounting Policies followed by various entities withinthe group:

(a) The foreign subsidiaries, listed in Note 1 above, have not accounted fordeferred taxation.

(b) Colorplus Fashions Limited provides depreciation on all the assets onthe written down value method, which is in variation to the methodsadopted by the other entities in the group. Further, accounting forimprovements to Leasehold Premises by Raymond Limited is in variationto the methods adopted by other entities in the group.

(c) Ring Plus Aqua Limited, a subsidiary, provides the depreciation for vehicleson straight line method at rate of 23 %, which is in variation to the methodsadopted by the other entities in the group.

(d) Provision for leave entitlement has been made by Raymond ApparelLimited in accordance with AS-15(Revised) which is in variation tomethods adopted by other entities in the group.

The impact of the above, in the opinion of the management, would not besignificant.

10 Raymond Limited hitherto followed the policy of writing off Goodwill arisingon consolidation. With effect from this year, Company has changed theaccounting policy to amortising such Goodwill over a period of ten years.Consequent to this change, the charge to Profit and Loss Account is lowerby Rs. 10040.23 Lacs, and Reserves and Surplus is higher by the same amount.

11 A. As per the terms of the Joint Venture Agreement entered into by theCompany with UCO NV, Belgium for manufacturing, selling anddistribution of Denim Fabric, the Company during the year, hived off itsDenim Unit at Yavatmal on a going concern basis to the Joint VentureCompany - Raymond UCO Denim Pvt. Ltd.(RUDPL) on the terms andconditions mentioned in the agreement. The financial statements of theyear, accordingly, reflect the impact of these transactions.

B The Company along with the Joint Venture Partner has undertaken toadditionally fund RUDPL in case it fails to meet certain covenants of theFacility cum Hypothecation Agreement entered into with a Bank.

31st March, 31st March,2007 2006

(Rs. in lacs) (Rs. in lacs)

73

2. Transactions carried out with related parties referred in 1 above, in ordinary course of business:

Related Parties (Rs. in lacs)

Referred in Referred in Referred inNature of transactions 1(a) above 1(b) above 1(c) above

Current Previous Current Previous Current Previousyear year year year year year

Purchases:Goods and Materials 544.80 211.55 690.84 561.14 — —

Fixed Assets — — 7.91 15.10 — —

Sales:Goods and Materials 359.91 145.88 95.20 134.06 — —

Fixed Assets 24.79 148.21 0.90 5.09 — —

Sale of Business 33,075.25 2,609.41 — — — —

Expenses:Rent and other service charges 13.90 3.54 761.84 573.21 3.00 3.00

Agency Commission — — 534.27 550.48 — —

Remuneration — — — — 707.50 420.92

Interest paid — — 20.74 16.09 — —

Professional Fees — — — — 58.90 33.06

Directors’ Fees — — — — 1.15 0.30

Other reimbursement — — 20.58 8.68 — —

Income:Rent and other service charges 352.85 69.81 188.46 49.42 1.80 1.80

Interest received 198.12 4.88 2.70 3.64 — —

Other Receipts:Deputation of staff 25.32 49.12 90.00 119.74 — —

Other reimbursement — 31.51 39.60 34.60 — —

Finance:Loans and Advances given 5,531.62 300.00 — — — —

Investments 23,741.19 4,825.00 — — — —

Outstandings:Payable 385.83 33.07 48.17 175.03 — —

Receivable 904.03 — 40.15 19.39 — —

Agency Deposits received 1.00 — 207.40 207.40 — —

Loans and Advances given 3,596.14 300.00 30.00 30.00 — —

Property Deposits paid 1.00 — 2,935.85 2,935.85 — —

12. Related parties disclosures:

1. Relationships:

(a) Joint Ventures:

Raymond Fedora Private Limited

Raymond Zambaiti Private Limited

Raymond UCO Denim Private Limited (and its subsidiaries)

Gas Apparel Private Limited

Rose-Preci-Form Private Limited

(b) Related parties where relationship of control exists:

J.K. Investo Trade (India) Limited

P. T.Jaykay Files Indonesia

Radha Krshna Films Limited

J.K. Helene Curtis Limited

J.K. Ansell Limited

J.K. Investors (Bombay) Limited

(c) Key Management Personnel, their relatives and their enterprises where transactions have taken place:

Dr. Vijaypat Singhania

Mrs. Asha Devi Singhania

Mr. Gautam Hari Singhania

Mr. Pradeep Kumar Bhandari

Silver Soaps Private Limited

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

74

13. SEGMENT INFORMATIONA. BUSINESS SEGMENT

(Rs. in lacs)

Particulars Textiles Garment Files Denim Auto Components Others Elimination Total

Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previous Current Previousyear year year year year year year year year year year year year year year year

Segment RevenueExternal Revenue 90586.44 77816.20 52291.01 42235.02 16060.11 16117.22 36440.26 28444.23 7723.50 5721.68 966.34 729.57 — — 204067.66 171063.92Inter-Segment Revenue 5968.40 5179.50 — — — — 256.70 969.70 5.15 — 181.84 — (6412.09) (6149.20) — —

Total Revenue 96554.84 82995.70 52291.01 42235.02 16060.11 16117.22 36696.96 29413.93 7728.65 5721.68 1148.18 729.57 (6412.09) (6149.20) 204067.66 171063.92

Segment Result 17720.73 19518.75 3586.56 2962.53 1668.30 1312.51 (1210.02) 2931.08 1241.73 857.96 (2547.41) (1907.30) 355.83 (59.44) 20815.72 25616.09Add/(Less):Pre-acquisition (Loss) — — (173.24) — — — — — — (92.82) — — — — (173.24) (92.82)Minority Interest — — — (420.87) 27.26 0.95 — — (110.25) (80.57) (1.74) — — — (84.73) (500.49)

17720.73 19518.75 3413.32 2541.66 1695.56 1313.46 (1210.02) 2931.08 1131.48 684.57 (2549.15) (1907.30) 355.83 (59.44) 20557.75 25022.78Unallocated income/(expenses) (Net) (220.40) (2339.68)Finance charges (6914.56) (3903.09)Interest Income 1897.54 1405.06Exceptional Items 3871.93 (538.25)Excess/(Short) provision for tax inrespect of earlier years 15.83 (16.07)Provision for Taxes (5490.10) (6097.46)Share of Profit in Associate Companies 280.72 75.82

Net Profit 13998.71 13609.11Other Information:Segment Assets 118642.37 88281.12 51037.91 33656.62 11211.65 10982.39 62787.59 46693.60 6965.79 5523.45 11329.91 4205.83 (1517.82) (1089.17) 260457.40 188253.84Unallocated assets 77766.83 83299.22Total Assets 338224.23 271553.06Segment Liabilities 24254.25 19481.66 7951.79 6109.00 3679.88 3516.75 7576.77 2733.01 1556.13 1319.20 318.16 393.85 (1528.15) (806.21) 43808.83 32747.26Minority Interest — — — 1692.86 52.34 79.60 — — 522.82 461.94 29.44 — — — 604.60 2234.40Unallocated Liabilities 150308.91 109196.01Total Liabilities 194722.34 144177.67Capital ExpenditureSegment capital expenditure 31148.45 26250.92 5493.35 6034.92 526.01 2018.80 13218.32 9804.37 824.51 5839.53 9680.85 355.61 — — 60891.49 50304.15Unallocated capital expenditure 822.09 4135.63Total capital expenditure 61713.58 54439.78Depreciation and Amortisation:Segment depreciation and amortisation 4735.01 3121.25 1684.92 1112.18 389.09 318.58 4565.48 3338.02 406.46 275.61 509.71 326.40 — — 12290.67 8492.04Unallocated depreciation andamortisation 283.30 246.20Total depreciation and amortisation 12573.97 8738.24Significant Non Cash Expenditure:Segment SignificantNon Cash Expenditure — 151.04 — 1.81 15.00 25.81 — — — — — 8.08 — — 15.00 186.74Unallocated non cash expenditure 140.28 205.18Total Significant Non Cash Expenditure 155.28 391.92Notes:1. Segment result is after adjusting prior period adjustments Rs.110.43 lacs (Previous year Rs.33.91 lacs)2. Depreciation and Amortisation includes Rs.1.66 lacs considered as prior period adjustment (Previous year Rs.1.38 lacs)3. Unallocated income aggregating Rs.5813.01 lacs (Previous year Rs.5424.14 lacs) mainly comprises of income from investments. Unallocated assets mainly relate to investments.

B. GEOGRAPHICAL SEGMENT(Rs. in lacs)

Particulars India Rest of the world Total

Current year Previous Year Current year Previous Year Current year Previous Year

Segment Revenue 128894.96 126766.42 75172.70 44297.50 204067.66 171063.92

Carrying cost of segment assets 201076.88 179347.10 59380.52 8906.74 260457.40 188253.84

Additions to Fixed Assets and Intangible Assets 50443.14 50060.95 10448.35 243.20 60891.49 50304.15

C. OTHER DISCLOSURES

1. Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account the organisation structure as well as thedifferential risks and returns of these segments.

2. The Company has disclosed Business Segment as the primary segment.

3. Types of products and services in each business segment:

Business Segment Types of Products and services

a) Textiles - Fabric, rugs, blankets, shawls and furnishing fabric

b) Denim - Denim fabric and cotton yarn

c) Garments - Readymade garments and designerwear

d) Files and Tools - Engineers’ files and rasps, H.S.S. twist drills and bars and rods (HRS)

e) Others - Consumer durables (divested with effect from 25th March, 2006) and Aviation

4. Inter Segment revenues are recognised at sales price.

5. The Segment Revenues, Results, Assets and Liabilities include the respective amounts identifiable to each of the segment and amounts allocated on areasonable basis.

75

ANNEXURE ICONSOLIDATED FINANCIAL STATEMENTS

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES(annexed to and forming part of the Accounts for the year ended 31st March, 2007)

I. BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

(i) The financial statements of the subsidiaries used in the consolidation aredrawn upto the same reporting date as that of the Parent Company, i.e.year ended 31st March. The foreign subsidiaries follow January toDecember as their financial year. In the case of these foreign subsidiariesthe Company has redrawn their financial statements for the year ended31st March.

(ii) The financial statements have been prepared under the historical costconvention (with the exception of all the fixed assets belonging to RegencyTexteis Portuguesa, Limitada and certain assets of subsidiaries of the JointVenture - Raymond UCO Denim Private Limited, which have been revaluedin accordance with the applicable local laws) and on the accrual basisof accounting. The accounts of the Parent Company, Indian Subsidiariesand Joint Venture Companies have been prepared in accordance withthe Accounting Standards issued by the Institute of Chartered Accountantsof India, and those of the foreign subsidiaries have been prepared inaccordance with the local laws and the applicable AccountingStandards/generally accepted accounting principles.

II. PRINCIPLES OF CONSOLIDATION :

(i) The financial statements of the Parent Company and its subsidiaries havebeen consolidated on a line-by-line basis by adding together the bookvalues of like items of assets, liabilities, income and expenses, aftereliminating intra-group balances, intra-group transactions and theunrealised profits.

(ii) The financial statements of the Parent Company and its subsidiaries havebeen consolidated using uniform accounting policies excepting therevaluation of assets by companies referred above and depreciation onall assets being provided on written down value method by one subsidiaryviz. Colorplus Fashions Limited for like transactions and other events in similarcircumstances. Besides this, Raymond Apparel Ltd. a subsidiary of RaymondLtd. has followed AS - 15 ( Revised ) for accounting leave entitlement whichis in variation to methods adopted by other entities of the group. Further,accounting for improvements to Leasehold Premises by Raymond Limitedis in variation to the methods adopted by other entities in the group.

(iii) The excess of the cost to the Parent Company of its investments in each ofthe subsidiaries over its share of equity in the respective subsidiary, on theacquisition date, is recognised in the financial statements as goodwill andamortised over a period of ten years. However, such excess or deficit arisingafter the acquisition date on account of currency fluctuation in respectof foreign subsidiary, is transferred to Currency Fluctuation Reserve.

III. RECOGNITION OF INCOME AND EXPENDITURE :

(i) Revenues/Incomes and Costs/Expenditure are generally accounted onaccrual, as they are earned or incurred.

(ii) Compensation to employees under Voluntary Retirement Scheme (VRS) iswritten off in the year of payment.

IV. FIXED ASSETS :

(i) All the fixed assets belonging to Regency Texteis Portuguesa Limitada andcertain assets belonging to the subsidiaries of the Joint Venture - RaymondUCO Denim Private Limited have been revalued and have beendepreciated as per the applicable local laws.

(ii) The fixed assets of the Parent Company (other than livestock) and othersubsidiaries (with the exception of assets stated under (i) above) are statedat cost, less accumulated depreciation (other than freehold land whereno depreciation is charged). Livestock are stated at book value.

V. METHOD OF DEPRECIATION AND AMORTISATION :

(i) Depreciation on Fixed Assets is provided :

(a) By Indian Companies - on WDV/SLM method and at rates under theCompanies Act, 1956.

(b) By foreign subsidiaries - on methods and at rates permissible underapplicable local laws or at such rates so as to write off the value ofassets over its useful life.

(ii) Cost of technical know-how capitalised is amortised over the period ofagreement.

(iii) Cost of Customised Software is amortised over a period of three to sixyears thereof.

14. Investments in equity shares of Associates:As at As at

31st March, 31st March,2007 2006

(Rs. in lacs) (Rs. in lacs)

(a) P. T. Jaykay Files Indonesia 69.60 69.60Add: Share of accumulated reserves/profits 447.12 481.66Add: Share of current profits 3.95 2.92

520.67 554.18Less: Exchange fluctuation on opening

retained earnings 12.40 37.46

508.27 516.72

(b) J.K. Investo Trade (India) Limited 326.12 326.12Add: Share of accumulated reserves/profits 1735.50 1663.72Less: Dividend received (including tax) 17.44 —Add:Share of current profits 281.74 71.78

2325.92 2061.62

(c) Radha Krshna Films Limited(including goodwill Rs.18.22 lacs) — 250.00Less: Share of accumulated losses — 227.02Less: Share of current losses — 4.76

— 18.22Less: Provision for diminution in

value of investment — 18.22

— —

15. Proportionate interest in retained earnings of Associates includes share inrevaluation reserve amounting to Rs.10.05 lacs (Previous year Rs.10.30 lacs).

Year ended Year ended31st March, 31st March,

2007 2006(Rs. in lacs) (Rs. in lacs)

16. Computation of Profit for Earnings per Share:Profit for the year after tax 13876.29 14294.41Add/(Less):Prior period adjustments 83.84 (151.74)

Minority Interest (84.73) (500.49)Pre-acquisition profit (173.24) (92.82)Share of tax on dividends (12.47) (5.88)(Short)/Excess provision for tax 15.83 (16.07)Share of Profit in Associate Companies 280.72 75.82

Profit including Exceptional Items 13986.24 13603.23Add:/(Less): Exceptional Items (net of tax) (5158.01) 60.41

Profit excluding Exceptional Items 8828.23 13663.64

Nominal value per Share in Rupees 10.00 10.00

17. Ring Plus Aqua Limited (RPAL) had impaired, during the previous year, theplant and machinery of pulley section by Rs.100.83 lacs (Net of deferredtax Rs.51.11 lacs) and had adjusted the same from the opening GeneralReserve as per the requirement of Accounting Standard 28 (AS-28) onImpairment of Fixed Assets. During the current year, RPAL is in the processof transferring the machinery of pulley section to the Joint VentureCompany, Rose Preci-Form Private Limited. The reversal of the impairmentof said fixed assets amounting to Rs.151.95 lacs has been credited toConsolidated Profit and Loss Account and consequently the deferred taxamounting to Rs.51.11 lacs has also been charged to the ConsolidatedProfit and Loss Account.

18. Previous year’s figures have been regrouped / recast wherever necessary.19. Significant Accounting Policies and Practices - Annexure I.

As per our Report of even date GAUTAM HARI SINGHANIAChairman and Managing Director

For and on behalf ofDALAL & SHAH H. SUNDER B. K. KEDIAChartered Accountants President - Finance NANA CHUDASAMA

ANANT SINGHANIA DirectorsU. V. RAO

ASHISH DALAL R. NARAYANAN NABANKUR GUPTAPartner Director-Legal & I. D. AGARWAL

Company SecretaryP. K. BHANDARIWholetime Director and Group President

Mumbai, 27th April, 2007 Mumbai, 27th April, 2007

!

76

(iv) Cost of Trademarks acquired is amortised over a period of five years thereof.

(v) Goodwill arising on consolidation is amortized over a period of ten years.

VI. INVESTMENTS :

Investments are classified into Current and Long-term Investments. Currentinvestments are stated at the lower of cost and fair value. Long-term Investmentsare stated at cost. A provision for diminution is made to recognise a decline,other than temporary, in the value of Long-term Investments.

VII. VALUATION OF INVENTORIES :

(i) The inventories resulting from intra-group transactions have been statedat cost after deducting unrealised profit on such transactions.

(ii) Stores and spare parts are stated ‘at or below cost’ and goods in transit ‘atcost’.

(iii) Other inventories are stated ‘at cost or net realisable value’, whichever islower.

(iv) Cost comprise of all costs incurred in bringing the inventories to their presentlocation and condition. Cost formulae used are either ‘average cost’ or‘specific identification’, as applicable. Due allowance is estimated andmade for defective and obsolete items, wherever necessary, based onthe past experience.

VIII. FOREIGN CURRENCY TRANSLATIONS :

For the purpose of consolidation, the amounts appearing in foreign currenciesin the Financial Statements of the foreign subsidiaries are translated at thefollowing rates of exchange:

(a) Average rates for the incomes and expenditure.

(b) The year-end rates for the assets and liabilities.

IX. FOREIGN CURRENCY TRANSACTIONS BY INDIAN COMPANIES :

(i) All loans and deferred credits repayable in foreign currency andoutstanding at the close of the year are expressed in Indian Currency atthe appropriate rates of exchange prevailing on the date of the BalanceSheet, except in cases where these borrowing are covered by forwardexchange contracts. Any increase or reduction in these liabilities, to theextent they relate to borrowings for financing imported fixed assets, is shownas addition to or deduction from the cost of the assets acquired out ofsuch borrowings, and the balance is booked to revenue. In respect oftransactions covered by Forward Exchange Contracts, the differencebetween the forward rate and exchange rate at the inception of thecontract is recognised as income or expense over the life of the contract.

(ii) Balances in the form of Current Assets and Current Liabilities in foreigncurrency, outstanding at the close of the year, are converted in localcurrency at the appropriate rates of exchange prevailing on the date ofthe Balance Sheet. Resultant gain or loss is accounted during the year.

(iii) All other incomes or expenditure in foreign currency, are recorded at therates of exchange prevailing on the dates when the relevant transactionstake place.

(iv) Transactions covered by cross currency swap contracts to be settled onfuture dates are recognised at the rates of exchange of the underlyingforeign currency prevailing on the date of the Balance Sheet. Effects arisingout of swap contracts are accounted/adjusted on the date of settlement.

X. RETIREMENT BENEFIT :

(i) Gratuity Liability under the payment of Gratuity Act and Provision for LeaveEntitlement is provided for at the end of each financial year, on the basisof an actuarial valuation and/or estimate.

(ii) Retirement benefit in the form of Provident Fund, Superannuation/PensionScheme and Social Security Schemes whether in pursuance of any law orotherwise is accounted on accrual basis and charged to the Profit andLoss Account of the year.

XI. TAXATION :

(i) Indian Companies -Income-tax expense comprises current tax, fringebenefit tax (FBT) and deferred tax charge or credit. Provision for currenttax is made on the basis of the assessable income at the tax rate applicableto the relevant assessment year. Provision for FBT is made on the basis ofthe fringe benfits provided / deemed to have been provided during theyear at the rates and values applicable to the relevant assessment year.The deferred tax asset and deferred tax liability is calculated by applyingtax rate and tax laws that have been enacted or substantively enactedby the Balance Sheet date. Deferred tax assets arising mainly on accountof brought forward losses and unabsorbed depreciation under tax laws,are recognised, only if there is a virtual certainty of its realisation, supportedby convincing evidence. Deferred tax assets on account of other timingdifferences are recognised only to the extent there is a reasonablecertainty of its realisation. At each Balance Sheet date, the carrying amountof deferred tax assets are reviewed to reassure realisation.

(ii) J.K. (England) Limited - Provision is made for taxation deferred as a result ofmaterial timing differences between the incidence of income andexpenditure for taxation and accounts purposes, using the liability method,only to the extent that, in the opinion of the Directors, there is a reasonableprobability that a liability or asset will crystallise in the near future.

(iii) Other foreign subsidiaries do not recognise the deferred tax assets/liabilities.

XII IMPAIRMENT OF ASSETS:

The carrying amounts of assets are reviewed at each Balance Sheet date ifthere is any indication of impairment based on internal/ external factors. Anasset is impaired when the carrying amount of the asset exceeds therecoverable amount. An impairement loss is charged to the Profit & LossAccount in the year in which an asset is identified as impaired. An impairmentloss recognised in prior accounting periods is reversed if there has been changein the estimate of the recoverable amount.

77

DETAILS OF BALANCE SHEET AS AT 31ST MARCH, 2007 AND INCOME AND EXPENDITURE FOR THE YEAR ENDED31ST MARCH, 2007 OF SUBSIDIARY COMPANIES

Indian Subsidiaries (Rs. in lacs) Foreign Subsidiaries (Rs. in lacs)

Particulars Raymond Pashmina Everblue Hindustan Colorplus Silver Celebrations Scissors Ring Plus JK J.K. Jaykayorg Regency R&AApparel Holdings Apparel Files Fashions Spark Apparel Engineering Aqua Talabot (England) AG Texteis LogisticsLimited Limited Limited Limited Limited Apparel Limited Products Limited Limited Limited (Switzerland) Portuguesa, Inc. (United

Limited Limited (United Limitada States ofKingdom) (Portugal) America)

1. Share Capital 3630.00 74.00 1500.00 377.01 498.00 1700.00 271.00 2695.40 760.66 805.44 0.86 17.92 561.88 0.13

2. Reserves and Surplus 7329.35 804.73 (1770.89) (115.39) 8011.90 (1126.95) (245.54) (26.55) 3337.42 (282.12) 255.75 2427.13 619.00 29.60

3. MiscellaneousExpenditure to theextent not written off – – – – – – – – – – – – – –

4. Total Assets 22759.70 1192.68 5083.50 1125.06 10134.24 8548.35 1816.46 2669.18 7053.32 2463.42 271.49 2573.52 3095.66 181.24

5. Total Liabilities @ 11800.35 313.95 5354.39 863.44 1624.34 7975.30 1791.01 0.32 2955.23 1940.11 14.89 1817.87 1914.78 151.51

6. Details of Investments

– Government Securities 0.04 – – – – – – – – – – – – –

– Shares(excluding subsidiaries) 8.05 13.81 – – – – – – 8.20 – – 716.60 – –

– Mutual Funds – 6.54 – – – – – – – – – – – –

7. Turnover and OtherIncome 23761.99 32.04 1684.75 2864.13 12306.60 7324.98 531.38 – 7397.85 192.95 305.59 516.21 4820.45 710.83

8. Profit Before Taxation 1626.16 (2.09) (545.17) 276.24 1963.29 273.20 (89.98) (0.45) 1257.13 (272.00) 19.05 (242.75) 34.92 1.20

9. Provision for Taxation * 553.39 0.91 3.87 32.50 649.99 8.05 0.79 – 534.94 0.59 12.05 (0.06) 20.33 0.25

10. Profit After Taxation 1072.77 (3.00) (549.04) 243.74 1313.30 265.00 (90.77) (0.45) 722.19 (272.59) 7.00 (242.69) 14.59 0.95

11. Proposed Dividend – – – – 0.04 – – – – – 0.26 – – –

@ Includes deferred tax liability (net); * Net of excess/short provision for tax in respect of earlier years.

Note: In respect of Foreign Subsidiaries:-

a) Item Nos. 1 to 6 and 11 are translated at exchange rates as on 31st March, 2007 as follows: Pound Sterling = Rs.85.61, Swiss Francs = Rs.36.83, Euro = Rs.58.14 and US Dollars = Rs. 43.59;

b) Item Nos. 7 to 10 are translated at annual average exchange rates as follows: Pound Sterling = Rs.85.85, Swiss Francs = Rs.36.63, Euro = Rs.58.18 and US Dollars = Rs. 45.25

The above details have been annexed in terms of Letter No.47/343/2006-CL-III dated January 11, 2007 issued by Government of India, Ministry of Company Affairs under Section 212(8) of the

Companies Act, 1956.

78

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. REGISTRATION DETAILS

Registration No. 1 2 0 8 State Code 1 1

Balance Sheet Date 3 1 . 0 3 . 0 7

II. CAPITAL RAISED DURING THE YEAR (AMOUNT IN RS. THOUSANDS)

Public Issue N I L Rights Issue N I LBonus Issue N I L Private Placement N I L

III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS (AMOUNT IN RS. THOUSANDS)

Total Liabilities 2 1 9 9 6 4 6 8 Total Assets 2 1 9 9 6 4 6 8

SOURCES OF FUNDS APPLICATION OF FUNDSPaid-up Capital 6 1 3 8 0 8 Net Fixed Assets 7 6 1 7 4 1 5Reserves & Surplus 1 2 9 4 7 7 8 6 Investments 9 8 4 4 7 5 0

Secured Loans 5 6 6 8 6 0 5 Net Current Assets 4 5 3 4 3 0 3

Unsecured Loans 2 2 0 7 4 9 6 Misc. Expenditure N I L

Deferred Tax Liability 5 5 8 7 7 3 Accumulated Losses N I L

IV. PERFORMANCE OF COMPANY (AMOUNT IN RS. THOUSANDS)

Turnover 1 3 7 4 9 7 1 7 Total Expenditure 1 1 3 6 7 3 8 9

Profit Before Tax 2 3 9 1 0 0 3 Profit After Tax 2 0 2 1 2 0 3

Earning per Share in Rs. 3 2 . 9 3 Dividend % 5 0

V. GENERIC NAMES OF PRINCIPAL PRODUCTS/SERVICES OF THE COMPANY (AS PER MONETARY TERMS)

ITEM CODE NO. (ITC CODE) PRODUCT DESCRIPTION

51121900, 51123000, 55151300 & 55151100 Woollen, Polyester/Wool Blended and Polyester/

Viscose Blended Fabrics

52094200 Denim Fabric

82031000 & 82075000 Files, Rasps, similar tools and H.S.S. Drills

N.A. Air Taxi Operations

ATTENDANCE SLIP

(To be presented at the entrance of the meeting venue)82ND ANNUAL GENERAL MEETING ON MONDAY, JUNE 18, 2007 AT 11.00 A.M.

at Plot No. 156/H. No.2, Village Zadgaon, Ratnagiri 415 612 (Maharashtra)

Folio No. .................................................................................. DP ID No. .............................................................. Client A/c. No. ..................................................

Name of the Shareholder: ................................................................................................................................................................................................................

Signature of the Shareholder: ...........................................................................................................................................................................................................

(only shareholders/proxies are allowed to attend the meeting.)

PROXY FORM

I/We ......................................................................................................... of .................................................................. being a member(s) of Raymond Limited

hereby appoint ...................................................................................... of............................................................................. in the district of .................................

as my/our proxy to attend and vote for me/us and on my/our behalf at the 82nd Annual General Meeting of Raymond Limited to be held onMonday, June 18, 2007 and at any adjournment thereof.

Folio No.: .............................................................

DP ID No. ............................................................ Client A/c. No.: ...............................................

Signed this ............................................. day of .......................... 2007. Signature across Revenue Stamp

✃

BANK ACCOUNT PARTICULARS/ECS MANDATE FORM

I/We ........................................................................................................................................................................... do hereby authorise Raymond Limited to :

* print the following details on my/our dividend warrant.

* credit my/our dividend amount directly to my/our Bank Account by ECS.

(*Strike out whichever is not applicable) My/Our Folio No.: ....................................................................................................

Particulars of Bank Account: DP ID No.: .................................... Client A/c. No.: ................................................

A. Bank Name : .................................................................................................................................

B. Branch Name : .................................................................................................................................

Address (for Mandate only) : .................................................................................................................................

C. 9 Digit Code number of the Bank & Branchas appearing on the MICR cheque : .................................................................................................................................

D. Account Type (Saving/Current/Overdraft) : .................................................................................................................................

E. Account No. as appearing on the cheque book : .................................................................................................................................

F. STD Code & Telephone No. : .................................................................................................................................

I/We shall not hold the Bank responsible if the ECS could not be implemented or the Bank discontinue(s) the ECS, for any reason.

MAIL TO :

INTIME SPECTRUM REGISTRY LIMITEDC-13, PANNALAL SILK MILLS COMPOUNDL. B. S. MARG, BHANDUP (WEST) ....................................................................................................................................MUMBAI-400078. Signature of the First Shareholder/Joint Shareholder

Please attach the photocopy of a cheque or a blank cancelled cheque issued by your Bank relating to your above account for verifying theaccuracy of the 9 digit code number.

In case you are holding shares in demat form, kindly advise your Depository Participant to take note of your Bank account particulars/ECSmandate.

AffixRevenue

StampRe. 1/-

✃

✃ ✃

IN

FO

ME

DIA

IN

DIA

L

IM

IT

ED