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DIRECTOR'S REPORT

Raymond Ltd.

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Market Cap. (₹) 3561.93 Cr. P/BV 1.82 Book Value (₹) 318.31
52 Week High/Low (₹) 885/533 FV/ML 10/1 P/E(X) 21.20
Bookclosure 05/06/2019 EPS (₹) 27.37 Div Yield (%) 0.52
Year End :2018-03 

Dear Members,

The Directors are pleased to present the Ninety-Third Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2018.

1. Corporate Overview

Raymond Limited (“Your Company” or “The Company”) is a leading Indian Lifestyle, Textile and Branded Apparel Company, with interests in Engineering (Files, Power Tools, Auto-Components), FMCG and Realty. The Group has its corporate headquarters at Mumbai.

2. Financial Results

A summary of the Company’s Financial Results for the Financial Year 2017-18 is as under:

Standalone

Consolidated

Particulars

Rs. in crore

Rs. in crore

March 31, 2018

March 31, 2017

March 31, 2018

March 31, 2017

Revenue from operations

3011.56

2822.18

5906.41

5391.32

Profit before tax (after exceptional item)

141.47

47.09

213.21

77 77

Tax Expenses (Including Deferred Tax)

43.40

13.26

66.63

21.84

Minority Interest and Share in Profit of Associates

-

-

(11.95)

(30.41)

Profit after Tax

98.07

33.83

134.63

25.52

3. Financial Performance

Your Company reported growth in revenue from operations of 6.71% over the Previous Year. At Standalone level, the Revenue from operations stood at Rs.3011.56 crore compared with Rs.2822.18 crore in the Previous Year. The Operating Profit stood at Rs.91.45 crore as against Rs.53.02 crore in the Previous Year. The Net Profit for the year stood at Rs.98.07 crore against Rs.33.83 crore reported in the Previous Year.

The Consolidated Revenue from operations for FY 2018 was Rs.5906.41 crore (Previous Year: Rs.5391.32 crore), registering a growth of 9.55%. The Consolidated Operating Profit stood at Rs.192.26 crore (Previous Year: Rs.87.82 crore). The Consolidated Profit after tax stood at Rs.134.63 crore (Previous Year: Rs.25.52 crore).

During the year under review, the Company has received Rs.50.02 crore representing the fair value of transferable development rights as compensation towards acquisition of Company’s land by Thane Municipal Corporation for its road widening project. The same has been taken to the books of account as an exceptional item.

During the year under review, the Company made a provision of Rs.4 crore towards diminution in the value of investments in Raymond UCO Denim Private Limited.

The Company continues to retain and reinforce its market leadership in branded suiting and shirting fabrics with a pan India distribution network comprising of exclusive stores, wholesalers and dealers.

In order to be globally price-competitive for exports market, a garmenting plant in Ethiopia was set up as a strategic move to ensure duty-free access to key export markets such as USA and Europe. Setting up a plant in Ethiopia is an important aspect of an integrated strategy. It will prove to be a catalyst for a new wave of growth for the Company.

In a bid to augment growth of Linen as a category, the Raymond group inaugurated its manufacturing facility at Amravati, Maharashtra inspired by Make In India initiative. This facility will give the much needed boost for Linen manufacturing in the country and help it emerge as a preferred provider of Linen in global markets.

Your Directors have also approved development of part of the land at Thane for residential purpose. The Company has secured major regulatory approvals and other construction related approvals are in process.

There are no material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year and the date of this Report.

4. Dividend And Reserves

Your Directors recommend a dividend of 30% i.e. Rs.3.00 per equity share of face value of Rs.10 each aggregating to Rs.18.41 crore (Previous Year: Rs.7.67 crore). During the year under review, your Company transferred a sum of Rs.35.50 crore to the Debenture Redemption Reserve (Previous Year: Rs.37.25 crore).

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. The Board has approved and adopted the Dividend Distribution Policy and the same is available on the Company’s Website viz. www.raymond.in.

During the year under review, Rs.25 crore was transferred to General Reserve from Debenture Redemption Reserve.

5. Share Capital

The paid up Equity Share Capital as at March 31, 2018 stood at Rs.61.38 crore. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

6. Finance and Accounts

During the year under review, your Company had redeemed Zero Coupon - 1000 Unsecured Redeemable Listed Non Convertible Debentures (NCD) for Series F of Rs.10,00,000/-each aggregating to Rs.100 crore on attaining maturity.

In March 2018, your Company had issued and allotted 8.65% - 1000 Unsecured Redeemable Listed Non-Convertible Debentures for Series K of Rs.10,00,000/- each for cash at par aggregating to Rs.100 crore on private placement basis. The NCDs are listed on Wholesale Debt Market (WDM) segment of National Stock Exchange of India Limited.

During the year under review, the Rating agency CARE maintained the “AA” rating for the Company’s long term borrowings. CRISIL and CARE maintained the A1 rating for the Company’s short term borrowings.

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgements relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Company’s state of affairs, profits and cash flows for the year ended March 31, 2018.

7. Performance of Subsidiary Companies

Domestic subsidiaries Raymond Apparel Limited

Raymond Apparel Limited brings to its customers stylish and innovative wardrobe solutions through some of India’s most prestigious brands - Raymond Premium Apparel, Park Avenue, Parx and ColorPlus. The Gross Revenue of the Company for FY 2018 stood at Rs.1399.52 crore (Previous Year: Rs.981.78 crore). Profit after tax for the year stood at Rs.13.75 crore (Previous Year: Rs.8.03 crore).

Pursuant to Scheme of Arrangement between Color Plus Fashions Limited (CPFL) and Raymond Apparel Limited (RAL), the Ready-made Garments and Accessories Undertaking / Business of CPFL was demerged into RAL. RAL and CPFL obtained the approval of the NCLT, Mumbai Bench on June 28, 2017 for the said Scheme of Arrangement.

Color Plus Fashions Limited

During the year under review the Ready-made Garments and Accessories Undertaking / Business of this subsidiary has been demerged into Raymond Apparel Limited. Consequently, the figures are not comparable with the previous year. The company’s Gross Revenue for FY 2018 stood at Rs.0.15 crore.

Silver Spark Apparel Limited

The company continued to retain its reputed overseas clientele for formal suits, jackets and trousers and the strong export order book led to a strong sales growth performance. The Gross Revenue of the company for FY 2018 stood at Rs.479.59- z crore (Previous Year: Rs.436.00 crore). The company had earned a Profit after tax of Rs.17.47 crore (Previous Year: Rs.21.75 crore).

Dress Master Apparel Private Limited

The company is engaged in garment manufacturing. The Gross Revenue of the company for FY 2018 stood at Rs.35.29 crore (Previous Year: Rs.38.26 crore). The company registered a Loss of Rs.4.01 crore (Previous Year: Loss of Rs.3.31 crore) during the year under review.

Celebrations Apparel Limited

This company has a state-of-the-art manufacturing facility for formal shirts. The Gross Revenue of the company for FY 2018 stood at Rs.83.53 crore (Previous Year: Rs.87.41 crore). The company earned a Profit of Rs.0.10 crore (Previous Year: Profit of Rs.0.43 crore).

Everblue Apparel Limited

This company has a world-class denim-wear facility offering seamless denim garmenting solutions. The Gross Revenue of the company for FY 2018 stood at Rs.69.82 crore (Previous Year: Rs.67.25 crore). The company earned a Profit after tax of Rs.0.55 crore (Previous Year: Rs.0.32 crore).

Raymond Woollen Outerwear Limited

During the year, the company had a Loss of Rs.0.02 crore (Previous Year: Loss of Rs.0.08 crore).

JK Files (India) Limited

This company manufactures steel files and cutting tool and markets hands tools and power tools. It is the leading manufacturer of steel files in the world with a domestic market share of ~65%.

The company reported a Gross Revenue of Rs.367.19 crore for the FY 2018 (Previous Year: Rs.354.11 crore). The Company registered a profit before exceptional item and tax of Rs.12.87 crore. However after exceptional item and tax, the company registered a loss of Rs.18.29 crore (Previous Year: Loss Rs.12.61 crore).

The Company during the year under review has closed its manufacturing unit at Kolkata (West Bengal) and provided Voluntary retirement from services (VRS) to employees at Kolkata. Some of the plant and equipment has been sold by the Company while the residual assets are being carried as assets held for sale. Due to VRS payment obligations, the performance of this subsidiary has been impacted.

JK Talabot Limited

This company manufactures files and rasps at its plant at Chiplun in Ratnagiri (Maharashtra). During FY 2018, the Gross Revenue of the company stood at Rs.20.94 crore (Previous Year: Rs.21.11 crore). The company reported a Profit after tax of Rs.1.93 crore during FY 2018 (Previous Year: Rs.1.49 crore).

Scissors Engineering Products Limited

This company registered a Loss of Rs.0.03 crore during the year under review (Previous Year: Loss of Rs.0.01 crore).

Ring Plus Aqua Limited

This company manufactures high quality Ring Gears, Flexplates and Water-pump bearing. It is present in all segments of industries like Automotive, Industrial & Powergen, Agricultural and Marine Application. It has a strong relationships with domestic and international OEMs.

The Gross Revenue of the Company for the FY 2018 stood at Rs.210.50 crore (Previous Year: Rs.165.93 crore). During the year under review, the company made a profit before tax of Rs.35.79 crore (Previous Year: Profit Rs.10.49 crore). The uptake in the auto industry led to an enhanced demand in auto components which resulted in better performance.

Pashmina Holdings Limited

The company made a Profit of Rs.0.76 crore in FY 2018 (Previous Year: Loss Rs.0.06 crore).

Raymond Luxury Cottons Limited

This company manufactures high value fine cotton and linen shirting for both domestic and international customers. The company inaugurated its all new state-of-the-art linen production facility in Amravati, Maharashtra. This facility has a manufacturing capacity of 4.8 million meters of linen and blended fabrics per annum. With the consumer preferences shifting towards natural fibres, the addition of this manufacturing facility is expected to enhance this company’s ability to meet the rising market demand of the discerning Indian consumer.

During the year under review, the Gross Revenue for the FY 2018 stood at Rs.575.29 crore (Previous Year: Rs.500.07 crore). The Net profit after tax stood at Rs.15.61 crore (Previous Year: Rs.14.38 crore).

Overseas subsidiaries

Jaykayorg AG

This company recorded a Profit of CHF 25,519 (equivalent to Rs.0.17 crore) for the year ended December 31, 2017 [Previous Year: Profit of CHF 98,202 (equivalent to Rs.0.64 crore)].

Raymond (Europe) Limited

The company recorded a profit of GBP 64,008 (equivalent to Rs.0.55 crore) for the year ended December 31, 2017 [Previous Year: Profit of GBP 73,077 (equivalent to Rs.0.63 crore)].

R & A Logistics INC, USA

This company is the subsidiary of Ring Plus Aqua Limited set up in USA to cater to the US based customers and made a Loss of USD 22,279 (equivalent to Rs.0.14 crore) [Previous Year: Loss of USD 23,282 (equivalent to Rs.0.17 crore)] for the year ended March 31, 2018.

Silver Spark Middle East (FZE)

This company is the wholly-owned subsidiary of Silver Spark Apparel Limited incorporated in Sharjah Airport Free Zone (SAIFZONE), Sharjah, UAE. This company is engaged in Investment, trading of Apparel and related products for Asia and US customers. The Gross Revenue of the company for FY 2018 stood at Rs.15.15 crore (Previous Year: Rs.Nil). The company earned a profit of Rs.1.56 crore (Previous Year: Loss of Rs.1.21 crore).

Raymond Lifestyle International DMCC

This company is the wholly-owned subsidiary of Raymond Limited and incorporated in the Dubai Multi Commodities Centre (DMCC), Dubai. This company is engaged in Trading of Textile, Apparel and related products for the Middle East, SAARC, GCC and African markets. The Gross Revenue of the company for FY 2018 stood at Rs.4.57 crore (Previous Year: Rs.0.04 crore). The company earned a profit of Rs.0.88 crore (Previous Year: Loss of Rs.1.98 crore).

Silver Spark Apparel Ethiopia PLC

Silver Spark Apparel Ethiopia PLC is step down subsidiary of Silver Spark Apparel Limited in Ethiopia. This company is a wholly owned subsidiary of Silver Spark Middle East (FZE). This company is engaged in manufacturing formal suits, jackets and trousers. The manufacturing facility has a capacity to produce 1.5 million suits per annum. The Gross Revenue of the company for FY 2018 stood at Rs.4.78 crore (Previous Year: Nil). The company registered a Loss of Rs.12.20 crore (Previous Year: Nil).

8. Performance of Joint Venture

Raymond UCO Denim Private Limited

This company is engaged in the business of manufacturing and marketing of denim fabrics and garments for both the domestic and international markets. In FY 2018, revenue from Indian operations was Rs.937.35 crore (Previous Year: Rs.875.32 crore).

The company made a Loss before interest on preference capital, tax and exceptional items of Rs.20.31 crore (Previous Year loss: Rs.38.46 crore).

9. Quality and Accolades

Your Company continues to win awards year-after-year, thus reiterating its credible market position. Some awards during FY 2018 are:

1. Chairman and Managing Director of the Company, Mr. Gautam Hari Singhania has been honoured with Maha Udyog Shri Award by Government of Maharashtra’s Awards for Industrial Excellence.

2. Raymond Limited was ranked 3 in the Apparel and Fashion Category for afaqs! India’s Most Buzziest Brands, 2017.

3. Raymond Limited won ET Now India Awards for Best Retail Company and Retailer of the year for The Raymond Shop.

4. Raymond Limited, Raymond Apparel Limited and Raymond Luxury Cottons Limited have emerged as the certified ‘Great Places to Work’ organisations in India.

5. Raymond Limited Store in Jekegram was honoured with the prestigious IMAGES Most Admired Retailer of the Year and Most Admired Design Concept of the Year Award.

6. Raymond Lifestyle won ‘Companies with Great Managers Award’ by People Business and Economic Times.

7. Raymond Textile division won CII Awards - Supply Chain and Logistic Excellence Award in retail category.

8. The Vapi Textile Unit won Gold at Chapter Convention on Quality Circle 2017 by Quality Circle Forum India.

9. The Chhindwara Textile Unit bagged the following awards:

- Golden Peacock Environment Management Award

- Silver SEEM National Energy Management

Award

10. Raymond Apparel Limited was awarded as “Most Admired Clothing Company of the Year” by Clothing Manufacturing Association of India Apex Awards.

11. Silver Spark Apparel Limited won the award by Apparel Export Promotion Council for Highest Global Exports FY17 and Highest Exports in Woollen Garments.

12. Raymond Luxury Cottons Limited, bagged following awards:

- State Level Award for Energy Conservation and Management.

- Excellence in Cost Management from Institute of Cost Accountants of India.

13. Raymond UCO Denim Private Limited, Yavatmal, bagged following awards:

- CII Most Innovative Environment Project Award for Environment Best Practices

- CII Energy Efficient Unit Award given by CII, Hyderabad for National Energy Management Award

- Vasundhara Award given by Maharashtra Government and MPCB for Environment Management

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this Report.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 and forms an integral part of this Report.

11. Management Discussion and Analysis Report

The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms an integral part of this Report.

12. Corporate Governance

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on corporate governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance forms an integral part of this Report.

13. Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is annexed as Annexure-A and forms an integral part of this Report.

14. Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company’s Articles of Association, Mr. H. Sunder, Director retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting. Brief profile of Mr. H. Sunder has been given in the Notice convening the Annual General Meeting.

Dr. Vijaypat Singhania vacated his Office as a Director in accordance with Section 167(1 )(b) of the Companies Act, 2013, effective from January 24, 2018. The Board places on record its sincere appreciation for the services rendered by Dr. Vijaypat Singhania during his tenure as Director of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. Number of Meetings of the Board

The details of the number of meetings of the Board held during the Financial Year 2017-18 forms part of the Corporate Governance Report. The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

16. Key Managerial Personnel

The following are the Key Managerial Personnel of the Company:

1. Mr. Gautam Hari Singhania: Chairman and Managing Director

2. Mr. Sanjay Bahl: Chief Financial Officer

3. Mr. Thomas Fernandes: Company Secretary

17. Committees of the Board

The Board of Directors has the following Committees:

1. Audit Committee

2. Remuneration and Nomination Committee

3. Committee of Directors (Stakeholders’ Relationship Committee)

4. Corporate Social Responsibility Committee

The details of the Committees along with their composition, number of meetings held and attendance at the meetings are provided in the Corporate Governance Report.

18. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance.

The performance evaluation of the Independent Directors was completed during the year under review. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors and Non-Executive Directors. The Board of Directors expressed their satisfaction with the evaluation process.

19. Particulars of Loans, Guarantees or Investments by the Company

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements.

20. Vigil Mechanism / Whistle Blower Policy

The Company has a Whistle Blower Policy to report genuine concerns or grievances for redressal. The Whistle Blower Policy has been posted on the website of the Company viz. www.raymond.in. During the year under review one complaint was received by your company which was duly investigated by an independent external professional and disposed.

21. Remuneration and Nomination Policy

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy have been posted on the website of the Company viz. www.raymond.in

22. Related Party Transactions

All transactions entered with Related Parties for the year under review were on arm’s length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus a disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel. All related party transactions are mentioned in the Notes to the Financial Statements. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

All Related Party Transactions are placed before the Audit Committee as also before the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which were of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Risk Assurance Department of the Company and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

The Company has put in place a mechanism for certifying the Related Party Transactions Statements placed before the Audit Committee and the Board of Directors from a reputed Independent Chartered Accountant firm.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company viz. www.raymond.in. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company except remuneration and sitting fees.

23. Significant and Material Orders Passed by the Regulators or Courts

There were no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

24. Directors’ Responsibility Statement

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

(i) that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) the directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a going concern basis;

(v) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(vi) that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. Auditors

(a) Statutory Auditor

Messrs Walker Chandiok & Co. LLP, Chartered Accountants (ICAI FRN 001076N/N500013) are the statutory auditors of the Company for the year ended March 31, 2018. Their appointment as the statutory auditors will be ratified at the ensuing Annual General Meeting pursuant to the provisions of Section 139 of the Companies Act, 2013, and Rules made thereunder.

There is no audit qualification, reservation or adverse remark for the year under review.

(b) Cost Auditor

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile Divisions every year.

The Board of Directors, on the recommendation of the Audit Committee, has appointed Messrs R. Nanabhoy & Co., Cost Accountants, (Firm Registration Number 000010) as Cost Auditor to audit the cost records of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking members’ approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

(c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed Messrs Ashish Bhatt & Associates, a firm of Company Secretaries in Practice (C.P.No.2956) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure-B and forms an integral part of this Report.

There is no secretarial audit qualification for the year under review.

26. Internal Control Systems and their Adequacy

Your Company has an effective internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The Company’s internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to Messrs Mahajan & Aibara LLP, a reputed firm of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

27. Risk Management

Risk management is embedded in your Company’s operating framework. Your Company believes that managing risks helps in maximizing returns. The Company’s approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee. Some of the risks that the Company is exposed to are:

Financial risks

The Company’s policy is to actively manage its foreign exchange risk within the framework laid down by the Company’s forex policy approved by the Board. Given the interest rate fluctuations, the Company has adopted a prudent and conservative risk mitigation strategy to minimize financial and interest cost risks.

Commodity price risks

The Company is exposed to the risk of price fluctuations of raw materials as well as finished goods. The Company proactively manages these risks through forward booking, inventory management and proactive vendor development practices. The Company’s reputation for quality, product differentiation and service, coupled with the existence of powerful brand image with a robust marketing network mitigates the impact of price risk on finished goods.

Regulatory risks

The Company is exposed to risks attached to various statutes, laws and regulations including the Competition Act. The Company is mitigating these risks through regular review of legal compliances carried out through internal as well as external compliance audits.

Human resource risks

Retaining the existing talent pool and attracting new talent are major risks. The Company has initiated various measures including rolling out strategic talent management system, training and integration of learning and development activities. The Company has also established a “Raymond Leadership Academy” which helps to identify, nurture and groom managerial talent within the Raymond Group to prepare them for future business leadership.

Strategic risks

Emerging businesses, capital expenditure for capacity expansion etc, are normal strategic risks faced by the Company. However, the Company has well-defined processes and procedures for obtaining approvals for investments in new businesses and capacity expansions.

28. Corporate Social Responsibility (CSR)

As a part of its initiative under the “Corporate Social Responsibility” (CSR) drive, the Company has undertaken projects in the area of eradicating hunger, preventive health care, water conservation, environment sustainability, women empowerment, girls education, child development and enhancing vocational skills. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company’s CSR policy. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-C and forms an integral part of this Report.

29. Environment and Safety

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at the workplace with a mechanism of lodging complaints. Besides, redressal is placed on the intranet for the benefit of employees. During the year under review, no complaints were reported to the Board.

30. Human Resources and Industrial Relations

The Company takes pride in the commitment, competence and dedication of its employees in all areas of the business. The Company has a structured induction process at all locations and management development programs to upgrade skills of managers. Objective appraisal systems based on key result areas (KRAs) are in place for senior management staff.

The Company is committed to nurturing, enhancing and retaining its top talent through superior learning and organizational development. This is a part of our Corporate HR function and is a critical pillar to support the organization’s growth and its sustainability in the long run.

31. Statutory Information

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-D and forms an integral part of this Report.

The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-E and forms an integral part of this Report. A statement comprising the names of top 10 employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure-F and forms an integral part of this report. The above Annexure is not being sent along with this annual report to the members of the company in line with the provision of Section 136 of the Companies Act, 2013. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid Annexure is also available for inspection by Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.

The Company has not accepted any deposits, within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

32. Business Responsibility Report

The Business Responsibility Report as required by Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed as Annexure-G and forms an integral part of this Report.

33. Cautionary Statement

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

34. Appreciation

Your Directors wish to place on record their appreciation, for the contribution made by the employees at all levels but for whose hard work, and support, your Company’s achievements would not have been possible. Your Directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers for their continued support and faith reposed in the Company.

For and on behalf of the Board

Gautam Hari Singhania

Chairman and Managing Director

DIN:00020088

Mumbai, April 24, 2018

Attention Investors :
Prevent Unauthorised transactions in your account --> Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile / email at the end of the day .......... Issued in the interest of investors
Attention Investors :
Prevent Unauthorized Transactions in your demat account --> Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile for all debit and other important transactions in your demat account directly from NSDL on the same day......................issued in the interest of investors.
Attention Investors :
KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
Attention Investors :
No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account.
“Investment in securities market are subject to market risks, read all the related documents carefully before investing”.