I.

INTRODUCTION OF PROCESS COSTING

In this chapter another costing method is discussed: process costing.

Process costing is used by organizations when a number of production
processes are involved and the output of one process is the input of a later
process; this continues until the final product is obtained. Examples of
industries where process costing might be applied are food processing,
chemicals and brewing industries.
Process costing is an accounting methodology that traces and
accumulates direct costs, and allocates indirect costs of a manufacturing
process. Costs are assigned to products, usually in a large batch, which might
include an entire month's production. Eventually, costs have to be allocated to
individual units of product. Process costing assigns average costs to each unit
and is the opposite extreme of job costing, which attempts to measure
individual costs of production of each unit.
Process costing is a form of operations costing which is used where
standardized homogeneous goods are produced. This costing method is used
in industries like chemicals, textiles, steel, rubber, sugar, shoes, petrol etc.
Process costing is also used in the assembly type of industries also. It is
assumed in process costing that the average cost presents the cost per unit.
Cost of production during a particular period is divided by the number of units
produced during that period to arrive at the cost per unit.
Process cost accounting systems (PCASs) are used in mass production
environments where homogeneous products flow continuously through
processes (departments), such as grinding, mixing, molding, and canning.
Examples include beer, cement, flour, dairy products, and paint. As partially
completed products move from process to process (department to department),
their costs are accumulated within each process and then transferred with the
products.
Some companies have homogeneous or very similar products that are
not made to order and are produced in large volumes. They continually
process their product, moving it from one function to the next until it is
completed. In these companies, the manufacturing costs incurred are allocated
to the proper functions or departments within the factory process rather than to
specific products. Examples of products that companies produce continuously
are cereal, bread, candy, steel, automotive parts, chips, and computers.
Companies that refine oil or bottle drinks and companies that provide services
such as mail sorting and catalog order are also examples of continuous,
homogeneous processing.

Basically, in process costing, WIP costs are accumulated in a particular

work center, cell, or department for an entire period, such as a month, then this
total is divided by the number of units produced during the period. The basic
formula for calculating the product's cost in a PCAS is:
Unit cost = Total department costs/Total units produced
Because each product is indistinguishable from any other product, each
bears the same average cost as any other unit during the period.
The basic CAS presented in is an example of a one-process
manufacturing operation. Cost elements are journalized to a single WIP
subsidiary account (Product Costs). In multiple-process manufacturing, a WIP
subsidiary ledger account is required for each process. The output of process 1
becomes a direct material input into process 2; then the output of process 2
becomes one of the direct materials input into process 3, and so forth.

Process costing is a method of costing used to ascertain the cost of

production of each process, operation or stage of manufacture where processes
are carried in having one or more of the following features

Where the product of one process becomes the material of another

processor operation
Where there is simultaneous production at one or more process of
different products, with or without by product,

II.

Where, during one or more processes or operations of a series, the

products or materials are not distinguishable from one another, as for
instance when finished products differ finally only in shape or form

DEFINITION OF PROCESS COSTING

In his A Dictionary for Accounts, Eric L. Kohler Defines process as:

1. Any unbroken series of acts, steps, or events or any unchanging
persisting condition.
2. H e n c e , t h e s e q u e n c e o f o p e r a t i o n s
3. M a k i n g u p a p l a n o f p r o d u c t i o n , a s o n a n a s s e m b l y l i n e ;
a n d c o n t i n u o u s system involving an unbroken chain of activities
4. A n d a m o r e o r l e s s c o n t i n u o u s o p e r a t i o n o n c o n s t a n t , a s
d i s t i n g u i s h e d from a job order system of production.

Process costing is defined by Kohler as:

A method of accounting whereby costs are charged top processes or
operations and averaged over units produced; it is employed principally where
a finished product is the result of a more or less continuous operation, as in
paper mills, refineries, canneries and chemical plants; distinguished from job
costing, where costs are assigned to specific orders, lots or units.

I.

III. CONCEPT AND MEANING OF PROCESS COSTING

The method of cost accounting used by processing firms is called
process costing system. For each process function, product costs lie direct
materials, direct labor and factory overheads are accumulated under
process costing method. For instance, the processing of a herbal medicine
includes herbs processing, herbs mixing, herbs medicine making and
packing.
Ascertainment of process costs facilitates to control costs, evaluate
performance and efficiency of each process. The cost of production
ascertained is compared with the prevailing market price of similar
products to assess performance. A constant reference of costs by elements
is needed to assess efficiency and performance of each process. The
purpose of assessing efficiency and performance of each process can be
achieved if a separate process account is maintained for each process.
The process account so maintained provides necessary cost information
essential for controlling the costs and evaluating performance and
efficiency of each process.
.
Process accounting helps a manufacturing firm to ascertain the cost
of production and the cost per unit of output at each stage of process. The
output of one process forms an input to the next process. Transferring the
output to the next process continues until the final process produces
finished products.
Elements/Components of Cost
For the purpose of cost accounting, the process industry is divided into
separate departments with each department representing a specific process.
The Direct Material and Direct Labour Costs are collected for each
department separately and the overheads, which are collected over all the
departments/processes,
are
apportioned
over
the
various
departments/processes on some rational basis The following are the main
elements/components of costs involved in the manufacturing process
where process costing is adopted.

FEATURES / CHARACTERISTICS OF PROCESSCOSTING

Process Costing Method is applicable where the output results from

sequence of continuous or repetitive operations or processes and products
are identical and cannot be segregated.
It enables the ascertainment of cost of the product at each process or stage
of manufacture. The following features may be identified with
process costing:
The output consists of products, which are homogenous.
Production is carried on in different stages (each of
w h i c h i s c a l l e d p rocess) having a continuous flow.
Production takes place continuously except in cases where the plant and
machinery are shut down for maintenance etc. Output is uniform and all
units are identical during each process. It would not be possible
to trace the identity of any particular lot of output to any lot of input.
The input will pass through two or more processes before it takes the
shape of the output. The output of each process becomes the input for the
next process until the final product is obtained, with the last process giving
the final product.
The output of a process (except the last) may also be saleable in which
case the process may generate some profit.
The input of a process (except the first) may be capable of being acquired
from the outside sources.
The output of a process is transferred to the next process generally at cost
to the process. It may also be transferred at market price to enable
checking efficiency of operations in comparison to the market conditions.
Normal and abnormal losses may arise in the processes

IV. ADVANTAGES AND DISADVANTAGES OF PROCESS

COSTING
Advantages:
1. Costs are be computed periodically at the end of a particular period.
2. It is simple and involves less clerical work that job costing.
3. It is easy to allocate the expenses to processes in order to have accurate
costs.
4. Use of standard costing systems in very effective in process costing
situations.
5. Process costing helps in preparation of tender, quotations.
6. Since cost data is available for each process, operation and department,
good managerial control is possible.
Disadvantages:

1. Cost obtained at each process is only historical cost and are not very
useful for effective control.
2. Process costing is based on average cost method, which is not that
suitable for performance analysis, evaluation and managerial control.
3. Work-in-progress is generally done on estimated basis which leads to
inaccuracy in total cost calculations.
4. The computation of average cost is more difficult in those cases where
more than one type of products is manufactured and a division of the
cost element is necessary.
5. Where different products arise in the same process and common costs
are prorated to various costs units. Such individual products costs may
be taken as only approximation and hence not reliable.

PROFILE OF RAYMOND COMPANY

Incorporated in 1925, Raymond Limited has four divisions comprising

of Textiles, Denim, Engineering Files & Tools, Aviation and Designer Wear.
Raymond Textile is India's leading producer of worsted suiting fabric
with over 60% market share. With a capacity of 25 million meters of wool
&wool-blended fabrics, Raymond Textiles is the worlds third largest
integrated manufacturer. The company exports its suitings to more than
50countries including USA, Canada, Europe, Japan and the Middle East. Over
the years, Raymond Textile has developed strong in-houses kills for research
& development, which has resulted in path-breaking new products. Perceived
as pioneer and innovator, Raymond Textile has been responsible for raising the
standard of the Indian textiles industry.
The Denim division has an installed capacity of 16 million meters and
produces high quality ring denims. The company currently ranks among the
top 3 producers in India. The products are exported to over 30 countries in the
world. The Engineering Files & Tools division, J K Files & Tools, is the
worlds largest producer of steel files with 90% market share in India and
about 30% market share in the world. The Designer Wear division, Benison
exclusive prt-a-porter range that houses designs by some of the finest, Indian
designers. Be: offers an eclectic mix of formal, office and eveningwear for
men and women, in western, ethnic and fusion styles with accessories. The
Aviation division, Million Air was launched in 1996 to provide air charter
services. Known for high quality and reliable services, Million Air has a fleet
of three helicopters and one executive jet.

PRODUCTION PROCESS OF RAYMOND COMPANY

V.

RAW MATERIALS

Wool:
The Merino brand of wool is imported from Australia, and supplied as
Tops by the wool Scouring and Grey Combing department.

Polyester:
A man made synthetic fiber which is in the form of staple fiber
or tow. There are three varieties Normal, Sparkle and Low pill.

Viscose:
A regenerated cellulosic fiber which is made from wood pulp.
Generally it is dope dyed by suppliers and is in fibrous form.
The production operations at our plant are coordinated by the
PRODUCTIONPLANNING & CONTROL department. Its role is to
gather information of all stock at various stages and communicate with
the different departments; so that production activities are synchronized.
Weave six months order in advance and divide the production activities
bi-annually in unison with the market, and our JALGAON and THANE
units.
First in the sequence is the RAW MATERIAL GODOWN
where the basic inputs procured are stored, accounted for and intimated
to the COMMERCIAL department. The first stage of processing is
DYEING. According to a dyeing plan set by the production planners,
the dyeing department is issued tops. Fabrics and yarn produced at
further stages which are grey or do not have the desired pigmentation
are also dyed.
Some polyester is procured in the form of tows. These are cut
and converted into sliver form and converted into tops in the
CONVERTER section. The material is sent back to the raw material go
down from where it is sent to the dyeing department. Only after a
perfect match with standard shades are the tops sent to the
RECOMBING department. In the Recombine department tops of
polyester and wool in sliver form are blended and mixedto produce a
uniform sliver (65% polyester & 35% wool). The processing ensures
that fiber is untangled. Straightened and parallel.

All there Tops (polyester and wool) are sent for spinning in the
WORSTED SPINNING department. The function of spinning is to
form yarn fiber. The yarn made is wound on a bobbin and is called
cheese.

Tops roll of sliver

Tow roll of continuous film or filament of fiber
Sliver fiber in a rope like form.
Simultaneously polyester and viscose fiber is dispatched from
the dyeing department and raw material go down (grey i.e. Undyed) to
the blow room or P/V SPINNING department where it is mixed in
proportion (67% polyester and 33% viscose). This mix is transformed
into sliver in the carding section which further processes and produces
a poly-viscose yarn.
All yarn is stored for intermediate purpose in a DOUBLE
YARN ROOM from here the yarn is issued to warping section of the
WEAVING department. At this stage yarn is woven into fabric. In the
MENDING department this fabric is under scrutiny for any defects to
be identified and removed. Every meter of fabric produced is checked.
The next stage of processing is the FINISHING department.
Fabric is washed cleaned and subjected to mechanical / chemical
operations with the aim of giving the fabric a smooth regular texture,
luster and anti-creasing effect. In the FOLDING department, finished
fabric is cut to proper length, wound and packed properly.
In addition to this we have a PLUSH department where we
manufacture FURNISHING fabric by procuring yarns from outside.
The packed goods are stocked in the WAREHOUSE from
where it is dispatch as per sales noteto respective dealers. This transfer
is communicated to the SALES office.

VI. HISTORY AND ORIGIN OF RAYMOND COMPANY

1925 The Company was incorporated on 10th September, 1925 at

Mumbai. It manufactures woolen and worsted and hosiery yarns, knitting
wool, engineers' steel files and cement.
30,000 shares issued to the Managing Agents for consideration other
than cash. 200 shares allotted to the Directors and 19,800 shares to their

friends for cash.

1950 A factory was set up at Thane for manufacturing engineers' steel

files.
1965 A new factory building was constructed and complete plant and
machinery with the exception of wool washing and backwashing

machinery were received and erected.

1966 The Balance machinery and high temperature wool top dyeing

machine were installed.

1967 The Raymond Woollen Mills Ltd., was registered in Kenya for
manufacturing knitting yarns and price goods of wool and wool mixed
with synthetic fibers, and woolen and worsted

fabrics.The Raymond

Woollen Mills (Kenya) Ltd., became a subsidiary of the Company. The

Company's holding in this subsidiary at the end of March 1996 stood at

5,40,000 of K. Shs. 200 each out of 7,55,625 shares of K. Shs. 200 each.
1968 J.K. (England), Ltd., a wholly owned subsidiary of the Company
were appointed to act as selling agents for woollen goods in U.K., with
effect from 1st January.

1970 The Company undertook a scheme of research and development for

sheep breeding and wool production in India with a view to produce

indigenously Merino type wool.

1973 5,04,000 Bonus equity shares issued in prop. 1:3.
1978 The Company undertook to set up a new woollen mill unit in Jalgaon

in Maharashtra. 20,16,000 Bonus equity shares issued in prop. 1:1.

1980 The Company offered to the public 1,20,000-12% (taxable) secured

debentures of Rs 400 each for cash at par.

1981- The Company offered during September, 6,00,000 No. of equity
shares of Rs 10 each at a premium of Rs 10 per share for cash (Prop. 5 No.
of equity: 1 Debenture). 27, 29,200 bonus equity shares issued in prop.

3:5. 25,000 - 5% Pref. shares cancelled. 25,000 - 5% pref. shares issued.

1982- The Company decided to set up a modern Wool Combing Division
in collaboration with Sir James Mill & Sons Ltd., Bradford, U.K.
The Dhule farm experienced a strike which culminated in violence and
theft. The Company, therefore, decided to discontinue the sheep
development project to avoid further loss of life and property.
The Company subsequently entered into an agreement with the
Maharashtra Sheep Development Corporation Ltd., under which the
Company's entire flock of sheep was handed over to them.
14,25,600 No. of equity shares issued at a prem. of Rs 2.50 per share to
financial institutions upon conversion of loans/debentures.

1984 - During September, the Company issued 4,80,000 - 13.5% secured

convertible debentures of Rs 475 each to provide a part of the finance
required for the expansion of the Company's cement plant. Of these
1,32,000 debentures were reserved for preferential allotment to nonresidents, 1,20,000 to the equity shareholders and 33,000 for allotment to
the Company's employees and business associates. The balance 1,95,000
debentures were offered to the public.
Each debenture holder has the right to receive 5 No. of equity shares of
Rs 10 each at a premium of Rs 5 per share on 1st April, 1985 without any
further notice. The non-convertible portion of Rs 400 per debenture is
redeemable at par in three annual installments of Rs 133, Rs 133, Rs 134
in the 8th, 9th and 10th year respectively.

1985 - 24,00,000 No. of equity shares of Rs 10 each issued (prem. Rs 5 per

share) upon conversion of 13.5% convertible debentures in April 1985.

25,000 - 6.5% Pref. shares redeemed on 30.6.1985.

1986 - The Company received a letter of intent for the manufacture of
High carbon/alloy steel profile sections, High speed steel twist drills, tool
bits, blanks, etc., Engineers steel files and rasps in the backward district of
Ratnagiri in Maharashtra.
The Company received a letter of intent for the manufacture of 15,000
tonnes per annum of polyester filament yarn (PFY). This project was
proposed to be set up in Allahabad district of U.P.
The Company offered 8,00,000 - 15% secured redeemable nonconvertible debentures of Rs 100 each as rights to resident Indian equity
and preference shareholders in the ratio 1 Deb. : 16 No. of equity shares
held and 5 debentures: 8 preference shares held. Additional debentures for
Rs 250 lakhs were allotted to retain excess subscription. These debentures
will be redeemed at a premium of 5% on the expiry of 7 years from the

date of allotment.
1987 - A memorandum of understanding was signed with Toray Industries
of Japan.
Another letter of intent was received for the manufacture of textiles
made wholly or partly out of synthetic fibre/yarns by installation of 50,000
spindles and 1,500 looms. This project was proposed to be set up in the
backward district of Balaghat in M.P.
The Company issued and allotted 10,00,000 (series IV) 14% nonconvertible debentures of Rs 100 each aggregating Rs 100 lakhs on rights
basis. These debentures are redeemable on 1st January, 1998 at a premium
of 5% on the face value of the debentures.
The Company privately placed with U.T.I., 2,50,000-14% nonconvertible debentures of Rs 100 each aggregating Rs 250 lakhs. These
debentures are redeemable at a premium of 5% of the face value, on 25th

January, 1995.
1,12,36,800 bonus equity shares issued in prop. 1:1.
1988 - As a part of expansion of its weaving capacity, 5 new looms were
installed on 31st March. 23 new looms were installed and combing
capacity was expanded. The Ring frames in the spinning department were
replaced.

The letter of intent for manufacture of 15,000 tonnes per annum of

PFY was transferred in the name of `Raymonds Synthetics, Ltd.', a
subsidiary

Company

promoted

to

implement

the

project.

1989 - A project to expand the capacity of the cement plant from 12 lakh
tonnes to 18 lakh tonnes per annum was being undertaken.
The Company issued 4,00,000-14% secured non-convertible
debentures of Rs 100 each on to financial institutions on private placement
basis. These debentures were to be redeemed on 12th June, 1996 at a
premium of Rs 5 per debenture. - During October, the Company offered
89,89,440 - 12.5% convertible debentures of Rs 75 each to the then
existing shareholders in the ratio of two debentures for every five equity
shares held. - Another 4,49,472 debentures were offered to employees,
Indian working directors and workers of the Company on an equitable
basis.
The Company retained 16,19,435 debentures to meet oversubscription.
As per the terms of issue, Rs 45 of each debenture will be converted into
one equity share of Rs 10 each at a premium of Rs 35 per share on 1st July,
1990. Accordingly, 106,08,875 shares were allotted. The remaining portion
of Rs 30 of each debenture will be redeemed at par in three equal
installments of Rs 10 each on the expiry of 7th, 8th and 9th year from the
date of of allotment of the debentures. The first instalments of Rs 10 per

debenture was redeemed during 1996-97.

1990 - A new plant for the manufacture of files and twist drills was being
set up at Pithampur, near Indore in Madhya Pradesh.
- It was decided to expand the installed capacity further from 18 lakh
tonnes to 22 lakh tonnes per annum by mid 1993. - The Company had
applied for a licence to produce 75,000 tonnes per annum of purified

terepthalic acid.
1993 - The Company proposed to manufacture cold rolled steel
strips/sheets and silicon steel sheets with an installed capacity of 1,50,000
MTA in technical collaboration with Allegheny Ludlum Corporation,
Pittsburg, USA at Wadivarhe, Nasik. The plant was commissioned in
September 1995.
The Company issued 90,63,577-16% (Taxable) Secured Redeemable
non-Convertible debentures of Rs 100 each with detachable warrants by

way of rights to the existing shareholders and employees. The holders of

the equity warrants have a right to apply and be allotted one equity share
of Rs 10 each upon payment of Rs 150 (Premium Rs 140).
During September, the Company issued US $63 million comprising of
39,57,286 GDRs equal to 79,14,572 No. of equity shares at a price of US $

15.92 per GDR.

1994 - The name of the Company was changed from Raymond Woollen

Mills Ltd. to Raymond Limited.

1995 - A new brand of cement `Dura-Guard' a high degree of durability
was introduced.
The Company promoted joint venture Company viz. Raymond Calitri
Denim Ltd. with Calitri Denim Industries SPA, Italy to produce high

quality ring denim fabrics.

1996 - The overall working was adversely affected by various factors such
as strike at its major textile plant at Chhindwara, slackness in demand and
consequently lower prices for most of the products, continuous escalation

in costs and credit stringency coupled with high interest costs.

1997 - The strike at the major textile plant at Chandwara was resolved in
the first week of April, and normal working was restored.
Due to fall in output of electrical equipment, demand for silicon steel
continued to be sluggish throughout the year. The Company entered into a
basic understanding with EBG Gesellschaft (belonging to Thyssen steel
group of Germany) for transfer of steel division into a joint venture subject

to necessary approvals.
1998 - J.K. (Mumbai), Ltd., is a wholly owned subsidiary of the Company.
All the 2 lakh equity shares of Rs 100 each issued by this subsidiary are
held by the Company as on 31st March.
Jaykayorg A.G., Switzerland with an issued and paid-up capital of 500
shares of Swiss Francs 100 each is a wholly owned subsidiary of the
Company.
As on 31st March, the Company held 2,39,930 No. of equity shares of
Rs 10 each respectively out of 2,40,000 No.of equity shares issued by
Pashmina Holdings, Ltd.
From January, J.K. Chemicals Ltd. became a subsidiary of the
Company. As on 31st March, the Company held 34,89,878 No. of equity
shares of Rs 100 each out of 58,22,200 No. of equity shares issued by the
subsidiary.

As on 31st March, the Company and its nominees held all the 9,80,000
No. of equity shares of Rs 10 each issued by J.K. Helene Curties Ltd.
As on 31st March, the Company and its nominees held 5,40,000 No. of
equity shares of K.Shs 200 each in the subsidiary.
The steel division was set up and the first phase was commissioned
during 1995. The company had tied up with Allegheny Ludlum of US, the
leader in speciality steel for a technology collaboration.
Raymond and EBG signed a memorandum of understanding on April
5, to form a joint venture.
The ratings assigned to the non-convertible debentures (NCD) issues
of Raymond Ltd and Raymond Synthetics Ltd have been downgraded to
AA- and AA-(SO) from AA and AA (SO), respectively by the Credit

Rating and Information Services of India Ltd (Crisil).

1999 - EBG Gesellschaft, a 100 percent subsidiary owned by the Thyssen
group, was to form a 76:24 joint venture with the steel division of
Raymond to form a new company named EBG India Ltd. - The `FAA'
rating assigned to the fixed deposit programme of Raymond has also been
placed under watch with developing implications.
The steel division, for which Raymond had a technical collaboration
with US-based Alleghany Ludlum Corporation, has an installed capacity of
45,000 silicon steel and one lakh tonne of cold rolled cold annealed, which
is

likely to be expanded by another one lakh tonne. 2000

Raymond Ltd. launched `Manzoni', a premium brand of formal shirts

and ties.
The Company has entered into a relationship with Morarjee Brembana,
the manufacturer, which will ensure that the most contemporary products
are introduced in the country.
CARE has reaffirmed the PR1+ rating to the company's commercial
paper programme of Rs 1 billion. - The Company has entered into a
Memorandum of Agreement dated April 27, for the divestment of its
Cement Division as a going concern to M/s. Lafarge India Ltd.
The Raymonds board approved the appointment of Mr Gautam
Singhania as the new chairman and managing director of the Raymond
Group.
Raymond has sold its steel unit for Rs 412.26 crore to EBG Germany,
a subsidiary of ThyssenKrupp Stahl, the German steel gian. - The company
accordingly signed the Agreement to Sell Undertaking with EBG India

Pvt. Ltd., and has received a sum of Rs. 386.86 crores in cash and has
allotted

2,54,00,000

No.

of

equity

shares

of

Rs.

10/-

each

aggregating Rs. 25.40 crores in the share capital of EBG India Pvt. Ltd.
The Vijaypat Singhania group flagship Raymond Ltd, as part of its
ongoing restructuring exercise, amalgamate its wholly owned subsidiary

Raymond Calitri Denim, which streered the group's foray into denim wear.
2001 - The Company has acquired the files division of the A.V. Birla group
company, HGI Industries. The two companies have signed a memorandum
of understanding for the transfer of HGI's plant in Kolkata to Raymond for
a consideration of Rs 17.5 crore.
Raymond Ltd will commence a buy-back offer of its shares at a
maximum price of Rs 160 rupees from 7th March.
J K Ansell, the 50:50 joint venture between the Vijaypat Singhania
group company Raymond and Australia-based Ansell International, is

expanding its business portfolio.

2002 - Raymond Ltd has selected Leo Burnett, RK Swamy BBDO and
Contract

Advertising

for

its

Rs.45cr

Advertising

account.

Raymong informed BSE that the Steel Files Division of HGI Industries
Ltd. located at Kolkota, West Bengal has been acquired by Hindustan Files
Ltd.
Raymond Ltd has executed the Memorandum of Understanding with
Color Plus Fashions Private Ltd.to acquire the entire share holding of
Color Plus in a phased manner and subject to due deligence and obtaining

necessary approvals.
2003 - Raymond Ltd has raised up Rs.25cr through its secured nonconvertible debenture issue through book building route with a greenshoe
option of the same amount.
Crisil has assigned AA+ rating to the debenture issue of Raymond Ltd.
Raymong Ltd has set to manufacture suit lengths in the Super 200's
wool category which will be only one of three companies to manufacture
this kind of suits.
Shri R Narayanan has been nominated as GM -Legal and Company

Secretary and Compliance Officer by the Raymong Ltd.

2003 - Raymond Ltd. has informed that the Board of Directors of the
Company at their meeting held on May 13, 2003 had nominated Shri R
Narayanan, General Manager - Legal & Company Secretary as
Compliance Officer.

Shri Akshay Singhania has ceased to be a Director of the Company

2004 - Raymonds sets up apparel subsidiary to cater to export mart
2005 - Raymond signs JV agreement with Lanificio Fedora, Italy on June
20, 2005
Raymond signs JV agreement with MOB Outillage, France
2006 - Raymond launches Chairman's Collection in South Indian market.
Raymond Ltd has informed that a 50:50 Joint Venture (JV) Agreement
has been signed on November 10, 2006 between the Company and Grotto
S.p.A., of Italy (the owner of the international brand 'Gas') for sale in India

of casual apparel and accessories bearing the trademark 'Gas'.

2008 - Raymond ltd has appointed Shri Thomas Fernandes, as the
Company Secretary & Compliance Officer of the Company with effect
from November 1, 2008 in place of Shri R. Narayanan who has retired

from the Company with effect from October 31, 2008.

2009 - Raymond Ltd has appointed Shri H. Sunder as President - Finance
& Chief Financial Officer of the Company with effect from December 16,

2009.
2010- Raymonds Buys Finest Australian Wool
Launch of Raymond's first exclusive Made-To-Measure store at
Palladium, Phoenix Mills.. - Raymond income rises marginally from

Rs.240 crore to Rs.244 crore 2011

Raymonds net profit rise 24 percent.
2012 - Raymond's auto components business acquires Trinity India
Raymonds - Board recommends Dividend 25% (Previous year 10%)
for the financial year 2011-12.
Raymond eye 2000 outlet over 180 town for makers brand in Gujarat.

VII. CASE STUDY OF RAYMOND COMPANY

COMPANY PROFILE:
Incorporated in 1925, Raymond Limited has four divisions comprising
of Textiles, Denim, Engineering Files & Tools, Aviation and Designer
Wear. Raymond Textile is India's leading producer of worsted suiting
fabric with over 60% market share. With a capacity of 25 million meters of
wool &wool-blended fabrics, Raymond Textiles is the worlds third largest
integrated manufacturer. The company exports its suitings to more than
50countries including USA, Canada, Europe, Japan and the Middle East.
Over the years, Raymond Textile has developed strong in-house skills for
research & development, which has resulted in path-breaking new
products. Perceived as pioneer and innovator, Raymond Textile has been
responsible for raising the standard of the Indian textiles industry.
The Denim division has an installed capacity of 16 million meters and
produces high quality ring denims. The company currently ranks among
the top 3 producers in India. The products are exported to over 30
countries in the world. The Engineering Files & Tools division K Files &
Tools, is the worlds largest producer of steel files with 90% market share
in India and about 30% market share in the world. The Designer Wear
division, Benison exclusive prt-a-porter range that houses designs by
some of the finest Indian designers. Be: offers an eclectic mix of formal,
office and eveningwear for men and women, in western, ethnic and fusion
styles with accessories. The Aviation division, Million Air was launched in
1996 to provide air charter services. Known for high quality and reliable
services, Million Air has a fleet of three helicopters and one executive jet.

 HISTORY
Around the time the Singhania family was building,
consolidating and expanding its various businesses in Kanpur, one Mr.
Wadia, was in a similar manner engaged in fulfilling his dream: he set up a
small woollen mill in the area around Thane creek, 40 kms away from
Bombay. This mill was soon acquired bythe Sassoons, a well-known
industrialist family of Bombay, who renamed it as The Raymond Woollen
Mills.When the Singhanias were looking for new regions to establish their
presence and new fields to venture into, they concurred that textiles
appeared to hold promise. A piece of information that a woollen mill was
available on the outskirts of Bombay clinched the issue. When the
grandson of Lala Juggilal, Lala Kailashpat Singhania took over Raymond
in 1944, the mill was primarily making cheap and coarse woollen blankets,
and modest quantities of low priced woollen fabrics.

DIVISIONS

Textiles:
Produces world-class pure wool, wool blended & polyester
viscose fabrics and blankets and ranks among the top 3 integrated
producers in the world. Also produces a wide range of furnishing
fabrics.
Denim:
The Denim division produces high quality ring denims
and ranks among the top 3 producers in India.

Files & Tools:

Files & Tools division manufactures complete range of
Engineer's steel files &drills and is the worlds largest
producer of steel files.

Be:
An exclusive prt-a-porter line of ready-to-wear designer
clothing for women and men in western, ethnic and fusion styles.
Aviation:
Million Air was launched in 1996 to provide air charter services
and enjoys are potation for high quality reliable services.

Textiles:
Recognized as the most respected Textile Company of India,
Raymond Limited is amongst the first three fully integrated
manufacturers of Worsted Suiting in the world. As the flag-bearer of the
multi-product, multi-divisional Raymond Group, it enjoys over 60%
share of Indian Worsted Suiting Market. It produces 25 million meters of
high-value pure-wool, wool blended and premium polyester viscose
suiting in addition to half a million blankets and shawls, all marketed
under the flagship brand "Raymond" - worldwide trusted name since
1925. It also produces and markets plush-velvet furnishing fabric in wide
array of designs and colors including carpeting for the niche markets of
India and Middle East.
Manufacturing facilities include three world-class fully
integrated plants in India, employing state-of-the-art technology from
wool scouring to finishing stage and modern quality management (ISO
9001) as well as Environment Control Systems (ISO 14001). All the
plants are self-sufficient in terms of providing educational, housing,
recreation and spiritual support system for the employees and connected
townships. Products are distributed through about 300 exclusive retail
shops in India and surrounding countries, 30,000 multi-brand retail
outlets and over 100wholesale distributors. In addition to Middle East
and SAARC countries, its products are sold to discerning customers in
over 60 countries including premium fashion labels all over the world.

Denim:
At Raymonds Denim Division, were somewhat passionate about
denim. We think of how denim can keep pace with changing fashion and
we try to come up with better ways of making plain blue denim. Call it
what you want: obsession, commitment, and perfectionism. To us, its
very simple .We love what we do. Raymond Denim, set up in 1996
produces 20 million meters of differentiated Ring spun denim per
annum. One of the worlds very few specialized manufacturers of fancy
denims our focus is on quality, innovation and enhanced creation of
niche products that satisfy the needs of the worlds leading Jeanswear
brands. Within a short time, we have also made our presence felt in the
global market. We have made our presence felt global market. A
substantial percentage of our production is exported to Europe, South

East Asia and North America. Our buyers include trendsetters like Levis,
Pepe, Zara, Gap, Tommy Hilfiger, Lee Cooper and AZDA amongst
others.

Files & Tools:

J.K. Files & Tools, a division of Raymond Ltd. was started in
1950 with its plant at Thane in Maharashtra, India. Today this division
manufactures a complete range of Engineers steel files besides HSS
drills and HSS tool bits from its three plants located in Maharashtra and
one in Madhya Pradesh.
J.K. Files & Tools is the world's largest manufacturer of steel
files with a predominant market share the world .J.K. Files & Tools is
also the largest producer of HSS Ground Flute Twist Drills in India with
HSS Cutting Tools being manufactured in Chiplun and Pithampur (M.P.)
plants. As part of backward integration, the division also operates a
captive Hot Rolling millat Pithampur (M.P.) for catering to its raw
material needs. All its plants areIS0 9001 certified and it boasts of an
impressive R & D and in-house machine building facilities. More than
50% of its production is exported to more than 50 countries, mainly to
developed markets like Europe & USA. For several decades the division
has been regularly receiving the Export Excellence Award. In its more
than 50 years of operations it has built up a strong goodwill and a wide
network of agents and dealers spread throughout the world.

Be:
There was a vision to make couture available to all who dreamt
of it but could not afford it. Raymond was cognizant of the fact that
awareness levels for designer wear was increasing in the country. The
rise in demand for value for money products and increasing fashion
awareness has seethe market for ready to wear increasing but it does not
fulfill consumer aspirations of owning the designer wear. Understanding
this need gap in the market an innovative venture was concept unlisted
by the inimitable textile giant, Raymond Limited. It was an ideal
marriage of two parties, a Corporate with strengths in marketing and
retailing and the designers gifted with immense talent. Raymond brought
together some of the finest Indian designers to introduce a radical and an
unheard of concept, Corporatization of Designer Wear with its Pret-aporter brand Be: Be: brings a large collection of designer products to a
large audience that is increasingly becoming aware of designer wear and

dreams of possessing one. Affordability, Accessibility and Acceptability

are the three attributes that characterize.
The first Be: store was inaugurated in New Delhi in July 2001
and today Be: has a multi city presence with eight stores in India with
two stores in New Delhi, and one each in Ludhiana, Bangalore, Mumbai,
Kolkata, Hyderabad and a shop in Pune. Be: also has an international
presence with a store in Dubai, UAE. The Be: chain will soon spread to
all-important cities in India and abroad.
Range-Be: offers a range of apparel and accessories for both
men (32%)and women (72%). Ladies wear comprises of Ladies Western
Wear (60%),Ladies Ethnic Wear (30%) and Ladies Accessories (8%)
while Mens wear which offers wide range of Mens Westerns is the
fastest-growing category. Be: merchandise is focused on specific target
group making it more wearable and acceptable to consumers.

Aviation:
Raymond diversified into Aviation launching the air taxi
service Million Air with a fleet of three helicopters and Fixed Wing
Aircraft in February 1996. It was aimed mainly at the Corporate Travel
Segment, which at that time was practically non-existent. Million Air,
which completes its eight years of operation in February 2004, now
boasts of a regular clientele of over 421top companies in India and
abroad.
Million Air has the distinction of achieving overall technical
reliability of 99%. During this period, it has operated over 10,000 flights
and flew over 27,900 passengers covering a distance of approx. 23,
25,000 kms. With Million Air you fly at your convenience, safely in
world-class comfort and in style. Million Air is also a member of HAI
(Helicopter Association International) &NBAA (National Business
Aviation Association, USA and has been awarded "safety Awards" by
both the organizations.
Services Offered:

Long distance travel (Domestic and International) on Business Jet

Aircraft
Emergency stretcher services on Helicopters
Aerial sightseeing tours and Joyrides
Visits to places of pilgrimage

Factory visits
Film shootings
Flower Dropping
Aerial photography/survey (with prior permission)
Electronic News Gathering

SCOURING
Objectives:

It is a process of removing grease and other impurities with hot water,

soda ash and detergent. It is a chemical process carried out in series of
bowls where the wool is washed thoroughly.

The impurities present in wool are:

Natural impurities oil, fats, secreted by sebaceous glands of
animal skin (wool fat)
Acquired impurities-sand, dust, and vegetable matter.
Applied impurities-raw wool contents 24 to 25 % of impurities.

Wool Scouring:

Capacity of the machine is to feed 950 kg of wool per hr.

Clean wool yield: 60 to 65% that depends up on wool quality.
We are getting 3 to 4 % more yield than the standard recommended value

 TRUSTS
A responsible corporate citizen, the Raymond group has displayed an
innate desire and a missionary zeal to contribute to the welfare and social up
liftmen of the community. Raymond has provided the educational, medical,
housing, recreational and spiritual support for its people wherever it has
created industry and employment. It also manages some trusts, which takes on
the companys social responsibility.
J.K. Trust:
The J. K. Trust provides scholarships and medical aid to not just its employees
but to anyone in need. Applications for the aid are accepted at the dispatch
counter at J.K. Building.
J.K. Trust Gram Vikas Yogana:
J.K. Trust Gram Vikas Yogana manages the cattle breed improvement program
through establishment of integrated livestock development centers. The trust
was established with the main objective to transfer the technology to the
grassroots and create a conducive environment for rapid development in rural
areas through extension, training and entrepreneurship. The cattle breed
improvement programmed takes care of a system, to upgrade the local
indigenous low milk yielding cows by crossbreeding them with use of frozen
semen from highly pedigreed exotic Holstein Friesian and Jersey bulls and
buffaloes with frozen semen of superior breeds such as Murrah and Surti. The
resulting crossbred cows/buffaloes being better milk yielders help in
improving the socio-economic status of the farmers. This led to the concept of
establishment of the Integrated Live stock Development (ILD) Centre and
the Gopal. The program operator or the Gopal who monitors each centre
is a local educated unemployed youth extensively trained for six months to
carry out artificial insemination in cattle. One centre covers about 1015villages falling within a radius of 8-10 kms. catering service to
approximately 2000 animals. The Gopal is provided with a motorbike and
renders services like veterinary first aids, castrations of indigenous bulls,
treatment of animals for infertility, deforming and preventive vaccination
against various diseases at the doorstep of the farmers. At present, around 180
centers are in operation in eleven districts of Chhattisgarh State, 69 centers in
eight districts of Madhya Pradesh and 150centres in two districts of Andhra
Pradesh.The establishment of the programmer of Integrated Livestock
Development Centers which commenced from a small beginning, will be soon
1000centre strong covering the states of Madhya Pradesh, Andhra Pradesh,
Chhattisgarh and other states like Maharashtra, Haryana and Himacha
Pradesh. The Programmed is being structured to meet the local conditions and
with the experience so gained, the Trust would soon initiate other activities,

which will induce further vibrancy into the lives of rural India. For J.K. Trust
Gram Vikas Yojana, this is just one small step forward incatalysing rural
development.
Smt. Sulochana Devi Singhania School Trust:
The Trust manages Smt. Sulochana Devi Singhania School at Jekegram,
Thane which is a co-educational school from Junior K.G. to XII standard,
affiliated to the Council for ICSE. Set up in 1969, the school campus isspread
in a sprawling 10.6 acres. The 3,800 students of this school have separate
outdoors and indoors sports facilities, five computer labs, each with 35 stateof-art computers and an open air theatre to express themselves creatively. In
2002 the school started XI & XII standard in Science stream offering Indian
School Certificate (ISC).

STRANGTHS AND WEEKNESSES

1. STRANGTHS

The company has strong Research and Development dept. for product
and new technology.
The company has many Bank facilities like long credit time and
other facilities.
The company has qualified and experience Human Resource
for selection and recruitment.

2. WEEKNESSES

The company has obsolete technology.

The company has low production in off session.
The company has less man power according to the work.

VIII.

CONCLUSION

Raymond Ltd having the good human resource. The entire

employees in the company are well trained and qualified in to the
work. All the departments are well established and fulfill the need
of the employee. So the work environment is very good.
Raymond Ltd is one of the leading multinational companies
in India. The company Raymond have the main competitors are not
the Indian they are also the multinational companies but they are
not the Indian company.

IX.

BIBLIOGRAPHY

WEBSITES
http://www.scribd.com
www.raymondindia.com
www.moneycontrol.com
www.answers.com