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SRF Ltd.

BSE: 503806 Sector: Industrials
NSE: SRF ISIN Code: INE647A01010
BSE 13:49 | 25 Jun 1640.95 -30.30






NSE 13:39 | 25 Jun 1645.00 -26.40






OPEN 1670.00
VOLUME 31818
52-Week high 2443.00
52-Week low 1420.00
P/E 23.23
Mkt Cap.(Rs cr) 9,422
Buy Price 1640.55
Buy Qty 81.00
Sell Price 1642.00
Sell Qty 15.00
OPEN 1670.00
CLOSE 1671.25
VOLUME 31818
52-Week high 2443.00
52-Week low 1420.00
P/E 23.23
Mkt Cap.(Rs cr) 9,422
Buy Price 1640.55
Buy Qty 81.00
Sell Price 1642.00
Sell Qty 15.00

SRF Ltd. (SRF) - Director Report

Company director report

Your Directors are pleased to present the 46th Annual Report for the yearended March 312017.

Financial Results

Particulars 2016-17 2015-16
Revenue from operations 4197.82 3944.97
Other income 46.11 36.99
Total Income 4243.93 3981.96
Profit Before Interest Depreciation & Tax (PBIDT) 867.58 844.36
Less: Interest & Finance Charge 77.53 95.43
Gross Profit 790.05 748.93
Less: Depreciation and amortisation charge 241.98 233.11
Profit Before Tax (PBT) 548.07 515.82
Less: Provision For Taxation including Deferred Tax Charge 129.25 143.95
Profit After Taxation (PAT) 418.82 371.87
Add: Profit Brought Forward 1941.40 1690.72
Total 2360.22 2062.59
Interim dividend on Equity Shares 68.90 57.42
Corporate Tax on Dividend 14.03 11.70
Other comprehensive income arising from remeasurement of defined benefit obligation 0.41 2.07
Amount transferred to Debenture Redemption Reserve - 50.00
Profit carried to Balance Sheet 2276.88 1941.40

Equity Dividend

During the year your Company has paid two interim dividends of Rs. 6 per share eachaggregating to Rs. 12 per share amounting to Rs. 82.93 Crores (inclusive of taxes). TheBoard of Directors of the Company has not recommended any final dividend.

Operations Review

Total revenue from operations of the Company on standalone basis increased by 6.41 percent from Rs. 3944.97 Crores in 2015-16 to Rs. 4197.82 Crores in 201617. Mainly due toincrease in revenue from operations the profit before interest depreciation and tax(PBIDT) including ‘other income' on a standalone basis increased from Rs. 844.36Crores in 2015-16 to Rs. 867.58 Crores in 2016-17.

Profit before tax (PBT) on a standalone basis increased by 6.25 per cent from Rs.515.82 crores in 2015-16 to Rs. 548.07 Crores in 2016-17. After accounting for theprovision for taxation of Rs. 129.25 crores profit after tax (PAT) on a standalone basisincreased by 12.63 per cent from Rs. 371.87 crores in 2015-16 to Rs. 418.82 crores in2016-17.

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.

Business Responsibility Report

As stipulated under the Listing Regulations the Business Responsibility Reportdescribing the initiatives taken by the Company from an environmental social andgovernance perspective has been prepared for 2016-17 and forms a part of the Board'sReport. Howhere as a green initiative the Business Responsbility Report for 2016-17 hasbeen hosted on the website of the company at Any shareholder who wants to obtain a physical copy of the samemay send a request to the Company at is registered office.

Subsidiaries Joint Ventures and Associate companies

During the year 2016-17 SRF Overseas Ltd.(SRFO) a wholly owned subsidiary of theCompany was wound up. It had a nylon tyrecord manufacturing facility in Dubai UAE whichwas closed in 2013-14 due to sustained downturn in European markets and high fixed costs.

As on March 31 2017 your Company had 5 (five) operating wholly owned subsidiarycompanies whereby

1 (one) wholly owned subsidiary company is registered in India and remaining 4 (four)are registered outside India.

2 (two) of these are direct wholly owned subsidiaries and rest 3 (three) are step-downwholly owned subsidiaries. The consolidated profit and loss account for the period endedMarch 31 2017 includes the profit and loss account for these 5 (five) wholly ownedsubsidiaries for the complete Financial Year ended March 312017 and for a part of theyear for SRFO which was wound up during the year.

These subsidiaries are:-

1. SRF Global B.V is a wholly owned subsidiary of the Company incorporated in theNetherlands. This entity is an SPV formed for the purpose of holding investments andmobilizing funds for the 3 (three) step-down subsidiaries of the Company.

2. SRF Industries (Thaland) Ltd.(a step down wholly owned subsidiary of SRF Global BV)is incorporated in Thailand engaged in the manufacture and distribution of nylon tyre cordand packaging films.

3. SRF Flexipak (South Africa) (Pty) Ltd.(a step down wholly owned subsidiary of SRFGlobal BV) is incorporated in South Africa engaged in manufacture and distribution ofpackaging films.

4. SRF Industex Belting (Pty) Ltd. (a step down wholly owned subsidiary of SRF GlobalBV) is incorporated in South Africa engaged in manufacture and distribution of beltingfabrics.

5. SRF Holiday Home Ltd. is a wholly owned subsidiary of the Company incorporated inIndia. This company is engaged in the business of acquisition and renting of real estateproperties.

The consolidated financial statements of the Company prepared in compliance withapplicable Accounting Standards and other applicable laws including all the abovesubsidiaries duly audited by the statutory auditors are presented in the Annual Report.

No other subsidiaries were divested and no new subsidiaries were incorporated. Nocompany has become/ceased to be a joint venture or associate during the year. A report onperformance and financial position of each of the subsidiaries and associates is presentedin a separate section in this Annual

Report. Please refer (AOC-1) annexed to the financial statements in the Annual Report.The Policy for determining material subsidiaries as approved may be accessed on theCompany's website at the link: companies%20-%20v2%20-%20Oct14.pdf.

The Company shall make available the annual accounts of the subsidiary companies to anymember of the Company who may be interested in obtaining the same. The annual accounts ofthe subsidiary companies will also be kept open for inspection at the registered office ofthe Company and respective subsidiary companies. Further the annual accounts of thesubsidiaries are also available on the website of the Company viz.

Directors & Key Managerial Personnel

Your Directors are seeking re-appointment of Mr. Arun Bharat Ram as Chairman withexecutive powers for a fresh term of 5 years effective from June 15 2018.

Being a Director lible to retire by rotation Mr. Arun Bharat Ram is also retiring atthe forthcoming annual general meeting and being eligible offers himself for re-election.

Mr. Arun Bharat Ram Chairman is a relative of Mr. Ashish Bharat Ram Managing Directorand Mr. Kartik Bharat Ram Deputy Managing Director. He is not related to any otherDirector or Key Managerial Personnel of the Company.

Mr. Ravichandra Kambhampaty Director (Safety & Environment) & Occupier hadresigned due to his advanced age and was relieved from the services of the Company onMarch 31 2017. Mr. Pramod Gopaldas Gujarathi was appointed as an additional director uptothe forthcoming annual general meeting and was appointed as Director (Safety &Environment) & Occupier with effect from April 12017 for a term of three years.

Your Directors recommend appointment of Mr. Pramod Gopaldas Gujarathi as a regularDirector and for his appointment as Director (Safety & Environment) & Occupier fora term of 3 years with effect from April 12017.

Mr. Pramod Gopaldas Gujarathi is not related to any Director or Key ManagerialPersonnel of the Company.

Brief resume of the Directors who are proposed to be appointed/re-appointed isfurnished in the explanatory statement to the notice of the ensuing Annual GeneralMeeting.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act and the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations").

In accordance with the requirements of the Companies Act and the Listing Regulationsthe Company has formulated a Nomination Appointment and Remuneration Policy. A copy ofthe Policy is enclosed as Annexure I.

In accordance with the aforesaid Policy the Nomination and Remuneration Committeeevaluates the performance of the Executive Directors Non- Independent nonexecutiveDirector 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. and number ofmeetings held during the year and the performance of its Committees on the criteria likefulfilment of role of the Committee with reference to its terms of reference theCompanies Act and the Listing Regulations and the number of committee meetings held duringthe 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 http://

Meetings of the Board

During the year 2016-17 five meetings of the Board of Directors were held. For furtherdetails please refer to report on Corporate Governance on page no. 57 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 accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively ; and

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arms' lengthbasis and in accordance with the Transfer Pricing Policy/basis approved by the AuditCommittee and/or in accordance with the Omnibus approval of 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 33 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 40(d) of Additional Disclosures forming part of the standalone financialstatement).

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. Lakshman Lakshminarayan Independent Director as other members.

The Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the projects to beundertaken by the Company which has been approved by the Board.

The CSR Policy may be accessed on the Company's website at the link: (05)%2011%20-%20SRF%20-%20CSR%20Policy%20-%20Board%20approved.pdf

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

During the year the Company has spent Rs. 7.60 Crores on CSR activities. The amount ofCSR obligation under the Companies Act 2013 was Rs. 7.58 Crores. Annual Report on CSRactivities is annexed herewith as Annexure II.

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 review of goals achieved

• evaluating & managing risks

• policies and procedures adopted for ensuring orderly Financial Reporting

• timely preparation of reliable Financial Information

• accuracy and completeness of the Accounting Records

• ensuring legal and regulatory compliance

• protecting company's assets

• prevention and detection of fraud and error

• validation of IT Security Controls

• Entity Level Controls

Interrelated control systems covering all financial and operating functions assurefulfillment 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 and help plugcontrol gaps CSA comprises Automated and Manual Controls. CSA Assurance Testing completesthe control compliance loop. In addition to this Compliance Manager (CM) a facilitatingtool sends pre-emptive alert to meet specific calendared regulatory deadlines in thecompany.

Listing of Equity Shares

SRF's equity shares are listed at the BSE Ltd. and the National Stock Exchange of IndiaLtd.

Dividend Distribution Policy

In compliance with the Listing Regulations your Board had formulated a DividendDistribution Policy. A copy of the said policy is available on the website of the Companyat Policy%2011.11.16.pdf.

Corporate Governance

Certificate of the auditors of your Company regarding compliance of the conditions ofcorporate governance as stipulated in regulation 34(3) of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 isattached to the report as Annexure III.

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 theCode of Conduct for Board and Senior Management Personnel. A declaration to this effectduly signed by the Managing Director is enclosed as a part of the Corporate GovernanceReport. A copy of the Code is also placed at the website of the Company (

Consolidated Financial Statement

The consolidated financial statements of the Company have been prepared in accordancewith the Indian Accounting Standards (Ind AS) to comply with the Accounting Standardsspecified under Section 133 of the Companies Act 2013 read with Companies (IndianAccounting Standards) Rules 2015 and other relevant provisions of the Act.

Audit Committee

The Audit Committee comprises of Independent Directors namely Mr. Vinayak Chatterjee(Chairman of the Committee) Mr. Lakshman Lakshminarayan and Mr. Vellayan Subbiah as othermembers. All the 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 Sr. Management Personnel.These taken together constitute the vigil mechanism through which Directors employees andother stakeholders can voice their concerns. The Whistleblower Policy Code of Conduct toRegulate Monitor and Report Trading by Insiders and Code of Conduct for Directors and Sr.Management Personnel can be accessed on the Company's website at the link investors.html#reports.

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.

Mr. Harkesh Tara Cost Accountant was appointed to conduct cost audit of the accountsmaintained by the Company for the financial year 2017-18 in respect of all the relevantproduct groups of Technical Textiles Business and Engineering Plastics Business of theCompany.

M/s. Sanjay Gupta & Associates Cost Accountants was appointed to conduct costaudit of the accounts maintained by the Company for the financial year 2017-18 in respectof all the relevant product groups of Chemicals Business and Packaging Films Business ofthe Company.

Mr. Harkesh Tara Cost Accountant was nominated as the Company's Lead Cost Auditor.

The remuneration of the cost auditors for financial year 2017-18 is subject toratification by the shareholders. Accordingly a suitable item has been included in thenotice of the ensuing annual general meeting.

The Cost Audit reports for audit of the said products for the financial year 2015-16conducted by Mr. Harkesh Tara Cost Accountant (M. No. 17321) and M/s Sanjay Gupta &Associates Cost Accountants (M. No. 18672) have been filed with the Ministry ofCorporate Affairs on August 30 2016. The due date for filing was 7th September 2016.

Secretarial Auditor

The Board has appointed M/s Sanjay Grover & Associates Practising CompanySecretaries to conduct Secretarial Audit for the financial year 2016-17. The SecretarialAudit Report for the financial year ended March 31 2017 is annexed herewith as AnnexureIV to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.


In terms of the provisions of Section 197(12) of the Companies Act read with Rules 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 a statement showing the names and other particulars of the employees drawingremuneration in excess of the limits set out in the said rules are provided in Annexure V.

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 VI.

Conservation of Energy Technology Absorption Foreign Exchange Earnings & Outgo

The details as required under the Companies (Accounts) Rules 2014 are given asAnnexure VII to the Directors' report.

Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annexure VIII to thisReport.

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 cooperation 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 22 2017 Arun Bharat Ram
Place: Gurgaon Chairman