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SRF Ltd.

BSE: 503806 Sector: Industrials
NSE: SRF ISIN Code: INE647A01010
BSE LIVE 15:40 | 18 Aug 1491.20 -1.30






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OPEN 1485.50
52-Week high 1969.50
52-Week low 1352.15
P/E 22.86
Mkt Cap.(Rs cr) 8,562
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1485.50
CLOSE 1492.50
52-Week high 1969.50
52-Week low 1352.15
P/E 22.86
Mkt Cap.(Rs cr) 8,562
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SRF Ltd. (SRF) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 45th Annual Report for the yearended March 31 2016.

Financial Results

(Rs. in crores)

2015-16 2014-15
Net Revenue from Operations 3646.82 3613.99
Profit Before Interest Depreciation & Tax (PBIDT) 837.26 701.62
Less: Interest & Finance Charges (Net) 89.04 96.66
Gross Profit 748.22 604.96
Less: Depreciation and amortisation charge 250.77 208.85
Profit Before Tax (PBT) 497.45 396.11
Less: Provision For Taxation including Deferred Tax Charge 136.58 88.38
Profit After Taxation (PAT) 360.87 307.73
Add: Profit Brought Forward 1557.28 1323.75
Surplus available for appropriation 1918.15 1631.48


(Rs. in crores)

2015-16 2014-15
Depreciation on transition to Schedule II of the 2013 Act on tangible fixed assets with Nil remaining useful life (Net of deferred tax) - 6.16
Interim dividend on Equity Shares 57.42 57.42
Corporate Tax on Dividend 11.69 10.62
Amount transfer to General Reserve - -
Amount transferred to Debenture Redemption Reserve 50.00 -
Profit carried to Balance Sheet 1799.04 1557.28
Total 1918.15 1631.48

Equity Dividend

During the year your Company has paid two interim dividends of Rs. 5 per share eachaggregating to Rs. 10 per share amounting to Rs. 69.11 crores (inclusive of taxes). TheBoard of Directors of the Company has not recommended any final dividend.

Operations Review

Net revenue from operations of the Company on standalone basis increased marginally by0.91 per cent from Rs. 3613.99 crores in 2014-15 to Rs. 3646.82 crores in 2015-16. Mainlydue to decrease in cost of materials consumed Profit before interest depreciation andtax (PBIDT) including ‘other income’ on a standalone basis increased from Rs.701.62 crores in 2014-15 to Rs. 837.26 crores in 2015-16.

Profit before tax (PBT) on a standalone basis increased by 25.58 per cent from Rs.396.11 crores in 2014-15 to Rs. 497.45 crores in 2015-16. After accounting for theprovision for taxation of Rs. 136.58 crores Profit after tax (PAT) on a standalone basisincreased by 17.27 per cent from Rs. 307.73 crores in 2014-15 to Rs. 360.87 crores in2015-16.

Management Discussion and Analysis

A detailed section of the Management Discussion and Analysis forms part of the AnnualReport. A review of the Businesses is also given in that section.

Subsidiaries Joint Ventures and Associate Companies

During the year no subsidiaries were divested and no new subsidiaries wereincorporated. No company has become/ ceased to be a joint venture or associate during theyear. A report on the performance and financial position of the subsidiaries is providedas Annexure I to this report. The Policy for determining material subsidiaries as approvedmay be accessed on the Company’s website at the link:


Your Directors are seeking re-appointment of Mr Kartik Bharat Ram DeputyManaging Director for a fresh term of 5 years effective from June 1 2016.

Dr Meenakshi Gopinath Director (CSR) is retiring at the forthcoming annual generalmeeting and being eligible offers herself for re-election.

Mr Kartik Bharat Ram Deputy Managing Director is a relative of Mr Arun Bharat RamChairman and Mr Ashish Bharat Ram Managing Director.

Brief resume of the Directors who are proposed to be reappointed is furnished in theexplanatory statement to the notice of the ensuing Annual General Meeting.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Listing Regulation.

In accordance with the requirements of the Act and the Listing Regulation the Companyhas formulated a Nomination Appointment and Remuneration Policy. A copy of the Policyforms is enclosed as Annexure II.

In accordance with the aforesaid Policy the Nomination and Remuneration Committeeevaluates the performance of the Executive Directors Non- Independent non-executiveDirector and Independent Directors. Board evaluates its own performance on criteria likedischarge of duties and responsibilities under the Companies Act and Listing Regulationsfulfilment of its role with respect to guiding corporate strategy risk policy businessplans corporate performance monitoring company’s governance practices etc. andnumber of meetings held during the year and the performance of its Committees on thecriteria like fulfilment of role of the Committee with reference to its terms ofreference the Companies Act and the Listing Regulations and the number of committeemeetings held during the year.

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the link

Key Managerial Personnel

During the year Mr Rajendra Prasad President & CFO retired from the services ofthe Company after serving the Company for 10 years. Mr Anoop K Joshi was appointed in hisplace as

President CFO & Company Secretary w.e.f. April 1 2016.

Meetings of the Board

During the year 2015-16 four meetings of the Board of Directors were held. For furtherdetails please refer to report on Corporate Governance on page no. 58 of this AnnualReport.

Directors’ Responsibility Statement

Pursuant to the requirements of Section 134(3)(c) of the Companies Act 2013 it ishereby confirmed: a) in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;(b) the directors had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period; (c) the directors had taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities; (d) the directors had prepared the annualaccounts on a going concern basis; (e) the directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operating effectively; and (f) the directors had devised proper systemsto ensure compliance with the provisions of all applicable laws and that such systems wereadequate and operating effectively.

Contracts and Arrangements with Related Parties

All contracts/arrangements/transactions entered by the Company during the financialyear with related parties referred to in subsection (1) of Section 188 of the CompaniesAct 2013 were in the ordinary course of business and on an arms’ length basis and inaccordance with the Transfer Pricing Policy/basis approved by the Audit Committee. Duringthe year the Company had not entered into any contract/arrangement/transaction withrelated parties which could be considered material in accordance with the Policy onmateriality of related party transactions.

Your Directors draw attention of the members to Note 35 to the notes to accountsforming part of the financial statements which sets out related party transactiondisclosures.

Particulars of Loans given Investments made Guarantees given and Securities provided

Particulars of loans given investments made guarantees given and securities providedalongwith the purpose for which the loan or guarantee or security was proposed to beutilised by the recipient are provided in the standalone financial statement (Please referto Note 46 to the standalone financial statement).

Corporate Social Responsibility (CSR)

As per the requirements of the Companies Act 2013 the Board has constituted aCorporate Social Responsibility Committee comprising of Dr Meenakshi Gopinath Director(CSR) (Chairperson of the Committee) Mr Kartik Bharat Ram Deputy Managing Director andMr L Lakshman Independent Director as other members. The Corporate Social ResponsibilityCommittee has formulated and recommended to the Board a Corporate Social ResponsibilityPolicy (CSR Policy) indicating the projects to be undertaken by the Company which hasbeen approved by the Board.

The CSR Policy may be accessed on the Company’s website at the link: html#governance.

The Company would also undertake other need- based initiatives in compliance withSchedule VII to the Act.

During the year the Company has spent Rs. 8.75 crores on CSR activities. The amount ofCSR obligation under the Companies Act 2013 was Rs. 6.50 crores. Annual Report on CSRactivities is annexed herewith as Annexure III.

Risk Management

Enterprise Risk Management is a risk based approach to manage_ an enterpriseidentifying events that may affect the entity and manage risks to provide reasonableassurance regarding achievement of entity’s objective.

The risks identified by the Company broadly fall into the following categories viz.strategic risks operational risks regulatory risks financial and accounting risksforeign currency and other treasury related risks and information systems risks. The riskmanagement process consists of risk identification risk assessment risk prioritizationrisk treatment or mitigation risk monitoring and documenting the new risks.

Your Board has laid down a risk management framework and policy to address the aboverisks. The objective of the policy is to identify existing & emerging challenges thatmay adversely affect the company and manage risks in order to provide reasonable assuranceto the various stakeholders. In the opinion of your Board none of the risks which havebeen identified may threaten the existence of the Company.

Internal Financial Controls

The Company believes that Internal Control is a necessary concomitant of the principleof Governance. It remains committed to ensuring an effective Internal Control environmentthat provides assurance to the Board of Directors Audit Committee and the management thatthere is a structured system for:

• close and active supervision by the Audit Committee business planning and reviewof goals achieved evaluating & managing risks policies and procedures adopted forensuring orderly

Financial Reporting

• timely preparation of reliable Financial Information accuracy and completenessof the Accounting Records

• ensuring legal and regulatory compliance protecting company’s assetsprevention and detection of fraud and error validation of IT Security Controls

Entity Level Controls

Interrelated control systems covering all financial and operating functions assurefulfilment of these objectives.

Significant features of these control systems include:

• the planning system that ensures drawing up of challenging goals and formulationof detailed strategies and action plans for achieving these goals.

• the risk assessment system that accounts for all likely threats to theachievement of the plans and draws up contingency plans to mitigate them.

• the review systems track the progress of the plan and ensure that timelyremedial measures are taken to minimise deviations from the plan.

The Company uses Enterprise Resource Planning (ERP) supported by in-built controls thatensures reliable and timely financial reporting. Well-established & robust internalaudit processes both at the Corporate and the Business levels continuously monitor theadequacy and effectiveness of the Internal Controls and status of compliance withoperating systems internal policies and regulatory requirements. All Internal Auditfindings and control systems are periodically reviewed by the Audit Committee of the Boardof Directors which provides strategic guidance on Internal Controls.

The Company also has a robust & comprehensive framework of Control Self-Assessment(CSA) which continuously verifies compliance with laid down policies & procedures andhelp plug control gaps CSA comprises Automated and Manual Controls. CSA Assurance Testingcompletes the control compliance loop. In addition to this Compliance Manager (CM) afacilitating tool sends pre-emptive alert to meet specific calendared regulatory deadlinesin the company.

Listing of Equity Shares

SRF’s equity shares are listed at the BSE Ltd. and the National Stock Exchange ofIndia Ltd.

Corporate Governance

Certificate of the auditors of your Company regarding compliance of the conditions ofcorporate governance as stipulated in regulation 34(3) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 is attached to this Report as Annexure IV.

In compliance with the requirements of the regulation 17(8) of the aforesaidregulations a certificate from Managing Director and President CFO & CompanySecretary was placed before the Board. All Board members and Corporate Leadership Team(CLT) have affirmed compliance with the Code of Conduct for Board and Senior ManagementPersonnel. A declaration to this effect duly signed by the Managing Director is enclosedas a part of the Corporate Governance Report. A copy of the Code is also placed at thewebsite of the Company (

Consolidated Financial Statement

The consolidated financial statements of the Company have been prepared in accordancewith the Generally Accepted Accounting Principles in India (Indian GAAP) to comply withthe Accounting Standards specified under Section 133 of the Companies Act 2013 read withRule 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of theCompanies Act 2013 ("the 2013 Act") and form part of the Annual Report andAccounts.

Audit Committee

The Audit Committee comprises of Independent Directors namely Mr Vinayak Chatterjee(Chairman of the Committee) Mr_L Lakshman and Mr Vellayan Subbiah as other members. Allthe recommendations made by the Audit Committee were accepted by the Board.

Accounts and Audit

As per the requirements of the Companies Act 2013 the Statutory Auditors M/s.Deloitte Haskins & Sells were appointed to hold office until the conclusion of 47thannual general meeting. Their appointment as per the provisions of the Companies Act 2013was subject to ratification by the members at every annual general meeting. They havesubmitted their certificate to the effect that they fulfill the requirements of Section141 of the Companies Act 2013. The observations of the auditors are explained wherevernecessary in appropriate notes to the accounts.

Vigil Mechanism

In compliance of provisions of the Companies Act 2013 and Listing Regulations thecompany has established a vigil mechanism for directors employees and other stakeholdersto report concerns about unethical behaviour actual or suspected fraud or violation ofthe company’s code of conduct.

The Vigil mechanism of the Company consists of Code of Conduct for employees Policyagainst sexual harassment Whistleblower Policy Code of Conduct to Regulate Monitor andReport Trading by Insiders and Code of Conduct for Directors and Senior ManagementPersonnel. These taken together constitute the vigil mechanism through which Directorsemployees and other stakeholders can voice their concerns. The Whistleblower Policy Codeof Conduct to Regulate Monitor and Report Trading by Insiders and Code of Conduct forDirectors and Senior Management Personnel can be accessed on the Company’s website atthe link

Cost Audit

Pursuant to the various circulars issued by Ministry of Corporate Affairs the Companyis required to maintain cost records for all the products being manufactured by it and getthe same audited by a cost auditor.

H Tara & Co. Cost Accountant was appointed to conduct cost audit of the accountsmaintained by the Company for the financial year 2016-17 in respect of all the relevantproduct groups of Technical Textiles Business and Engineering Plastics Business of theCompany.

Sanjay Gupta & Associates Cost Accountant was appointed to conduct cost audit ofthe accounts maintained by the Company for the financial year 2016-17 in respect of allthe relevant product groups of Chemicals Business and Packaging Films Business of theCompany.

H Tara & Co. Cost Accountant was nominated as the Company’s Lead CostAuditor.

The remuneration of the cost auditors for 2016-17 is subject to ratification by theshareholders. Accordingly a suitable item has been included in the notice of the ensuingannual general meeting.

The Cost Audit reports for audit of the said products for the year 2014-15 conductedby Mr Harkesh Tara Cost Accountant (M. No. 17321) and M/s Sanjay Gupta & AssociatesCost Accountants (M. No. 18672) have been filed with the Ministry of Corporate Affairs onSeptember 15 2015. The due date for filing was September 27 2015.

Secretarial Auditor

The Board has appointed M/s Sanjay Grover & Associates Practising CompanySecretary to conduct Secretarial Audit for the financial year 2015-16. The SecretarialAudit Report for the financial year ended March 31 2016 is annexed herewith as Annexure Vto this report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

Fixed Deposits

Your Company discontinued accepting/renewing fixed deposits since August 14 2004.Deposits accepted from Public which have matured and are unclaimed are being reflectedunder "Unclaimed fixed deposits (including interest)" in other currentliabilities (Note no. 9 forming part of the financial statements for the year ended March31 2016).


In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules are provided in Annexure VI.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in Annexure VII.

Conservation of Energy Technology Absorption Foreign Exchange Earnings & Outgo

The details as required under the Companies (Accounts) Rules 2014 are given asAnnexure VIII.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure IX to thisreport.

Having regard to the provisions of the first proviso to Section 136(1) of the Act theAnnual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the registered office of theCompany during working hours and any member interested in obtaining such information maywrite to the President CFO & Company Secretary and the same will be furnished onrequest. The full Annual Report including the aforesaid information is available on theCompany’s website "".

Industrial Relations

The Company continued to generally maintain harmonious and cordial relations with itsworkers in all its businesses.


Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there was no transactions on these items during the year under review:-

1. Details relating to deposits covered under Chapter V of the Companies Act 2013.

2. Neither the Chairman Managing/Deputy Managing Director nor Whole-time Directorreceived any remuneration or commission from any of the Company’s subsidiaries.

3. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company’s operations in future.

As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 (‘Act’) and Rules made thereunder yourCompany has constituted Internal Complaints Committees (ICC). During the year nocomplaints with allegations of sexual harassment were filed with the Company.


Your Directors acknowledge with gratitude the co-operation and assistance received fromvarious agencies of the Central Government and the Governments of Madhya PradeshRajasthan Tamil Nadu Gujarat and Uttarakhand financial institutions and banks. YourDirectors thank the shareholders for their continued support. Your Directors also place onrecord their appreciation of the contribution made by employees at all levels.

For and on Behalf of the Board
Date: May 10 2016 Arun Bharat Ram
Place: Gurgaon Chairman
(DIN - 00694766)