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Updated:21 Oct, 2020, 16:02 PM IST

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Updated:21 Oct, 2020, 16:01 PM IST


Dear Members,

Your Directors are pleased to present the 45th Annual Report for the year ended March 31, 2016

Equity Dividend

During the year, your Company has paid two interim dividends of Rs. 5 per share each aggregating to Rs. 10 per share, amounting to Rs. 69.11 crores (inclusive of taxes). The Board 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 by 0.91 per cent from Rs. 3613.99 crores in 2014–15 to Rs. 3646.82 crores in 2015–16. Mainly due to decrease in cost of materials consumed, Profit before interest, depreciation and tax (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 the provision for taxation of Rs. 136.58 crores, Profit after tax (PAT) on a standalone basis increased by 17.27 per cent from Rs. 307.73 crores in 2014–15 to Rs. 360.87 crores in 2015–16.

Management Discussion and Analysis

A detailed section of the Management Discussion and Analysis forms part of the Annual Report. 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 were incorporated. No company has become/ ceased to be a joint venture or associate during the year. A report on the performance and financial position of the subsidiaries is provided as Annexure I to this report. The Policy for determining material subsidiaries as approved may be accessed on the Company's website at the link: <–>relations/investors.html#governance.


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

Dr Meenakshi Gopinath, Director (CSR) is retiring at the forthcoming annual general meeting and being eligible offers herself for re–election.

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

Brief resume of the Directors who are proposed to be re–appointed is furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

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

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

In accordance with the aforesaid Policy, the Nomination and Remuneration Committee evaluates the performance of the Executive Directors, Non– Independent non–executive Director and Independent Directors. Board evaluates, its own performance on criteria like discharge of duties and responsibilities under the Companies Act and Listing Regulations, fulfilment of its role with respect to guiding corporate strategy, risk policy, business plans, corporate performance, monitoring company's governance practices etc. and number of meetings held during the year and the performance of its Committees on the criteria like fulfilment of role of the Committee with reference to its terms of reference, the Companies Act and the Listing Regulations and the number of committee meetings held during the year.

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link–relations/investors.html#governance

Key Managerial Personnel

During the year Mr Rajendra Prasad, President & CFO retired from the services of the Company after serving the Company for 10 years. Mr Anoop K Joshi was appointed in his place 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 further details, please refer to report on Corporate Governance on page no. 58 of this Annual Report.

Directors' Responsibility Statement

Pursuant to the requirements of Section 134(3)(c) of the Companies Act, 2013, it is hereby confirmed:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets  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 the company and that such internal financial controls are adequate and were operating effectively; and

(f) 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.

Contracts and Arr 'angements with Related Parties

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

Your Directors draw attention of the members to Note 35 to the notes to accounts forming part of the financial statements which sets out related party transaction disclosures.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

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

Corporate Social Responsibility (CSR)

As per the requirements of the Companies Act, 2013, the Board has constituted a Corporate Social Responsibility Committee comprising of Dr Meenakshi Gopinath, Director (CSR) (Chairperson of the Committee), Mr Kartik Bharat Ram, Deputy Managing Director and Mr L Lakshman, Independent Director as other members.

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility

Policy (CSR Policy) indicating the projects to be undertaken by the Company, which has been approved by the Board.

The CSR Policy may be accessed on the Company's website at the link: <–relations/investors>. html#governance.

The Company would also undertake other need– based initiatives in compliance with Schedule VII to the Act.

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

Risk Management

Enterprise Risk Management is a risk based approach to manage an enterprise, identifying events that may affect the entity and manage risks to provide reasonable assurance 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 risks, foreign currency and other treasury related risks and information systems risks. The risk management process consists of risk identification, risk assessment, risk prioritization, risk treatment or mitigation, risk monitoring and documenting the new risks.

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

Internal Financial Controls

The Company believes that Internal Control is a necessary concomitant of the principle of Governance. It remains committed to ensuring an effective Internal Control environment that provides assurance to the Board of Directors, Audit Committee and the management that there 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, assure fulfilment of these objectives.

Significant features of these control systems include:

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

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

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

The Company uses Enterprise Resource Planning (ERP) supported by in–built controls that ensures reliable and timely financial reporting. Well–established & robust internal audit processes, both at the Corporate and the Business levels, continuously monitor the adequacy and effectiveness of the Internal Controls and status of compliance with operating systems, internal policies and regulatory requirements. All Internal Audit findings and control systems are periodically reviewed by the Audit Committee of the Board of 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 plug control gaps CSA comprises Automated and Manual Controls. CSA Assurance Testing completes the control compliance loop. In addition to this, Compliance Manager (CM) a facilitating tool sends pre–emptive alert to meet specific calendared regulatory deadlines in the company.

Listing of Equity Shares

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

Corporate Governance

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

In compliance with the requirements of the regulation 17(8) of the aforesaid regulations, a certificate from Managing Director and President, CFO & Company Secretary 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 Management Personnel. A declaration to this effect duly signed by the Managing Director is enclosed as a part of the Corporate Governance Report. 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 accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") and form part of the Annual Report and Accounts.

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. 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 47th annual general meeting. Their appointment as per the provisions of the Companies Act, 2013 was subject to ratification by the members at every annual general meeting. They have submitted their certificate to the effect that they fulfill the requirements of Section 141 of the Companies Act, 2013. The observations of the auditors are explained wherever necessary in appropriate notes to the accounts.

Vigil Mechanism

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

The Vigil mechanism of the Company consists of Code of Conduct for employees, Policy against sexual harassment, Whistleblower Policy, Code of Conduct to Regulate, Monitor and Report Trading by Insiders and Code of Conduct for Directors and Senior Management Personnel. These taken together constitute the vigil mechanism through which Directors, employees and other stakeholders can voice their concerns. The Whistleblower Policy, Code of Conduct to Regulate, Monitor and Report Trading by Insiders and Code of Conduct for Directors and Senior Management Personnel can be accessed on the Company's website at the link <–>relations/investors.html#governance.

Cost Audit

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

H Tara & Co., Cost Accountant, was appointed to conduct cost audit of the accounts maintained by the Company for the financial year 2016–17 in respect of all the relevant product groups of Technical Textiles Business and Engineering Plastics Business of the Company.

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

H Tara & Co., Cost Accountant, was nominated as the Company's Lead Cost Auditor.

The remuneration of the cost auditors for 2016–17 is subject to ratification by the shareholders. Accordingly a suitable item has been included in the notice of the ensuing annual general meeting.

The Cost Audit reports for audit of the said products for the year 2014–15, conducted 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 of Corporate Affairs on September 15, 2015. The due date for filing was September 27, 2015.

Secretarial Auditor

The Board has appointed M/s Sanjay Grover & Associates, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2015–16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith as Annexure V to this report. The Secretarial Audit Report does not contain any qualification, reservation 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 reflected under "Unclaimed fixed deposits (including interest)" in other current liabilities (Note no. 9 forming part of the financial statements for the year ended March 31, 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, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in Annexure VI.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial 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 as Annexure VIII.

Extract of Annual Return

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

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

Industrial Relations

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


Your Directors state that no disclosure or reporting is required in respect of the following 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 Director received any remuneration or commission from any of the Company's subsidiaries.

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

As per the requirement of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder, your Company has constituted Internal Complaints Committees (ICC). During the year, no complaints with allegations of sexual harassment were filed with the Company.


Your Directors acknowledge with gratitude the co–operation and assistance received from various agencies of the Central Government and the Governments of Madhya Pradesh, Rajasthan, Tamil Nadu, Gujarat and Uttarakhand, financial institutions and banks. Your Directors thank the shareholders for their continued support. Your Directors also place on record their appreciation of the contribution made by employees at all levels.

For and on Behalf of the Board

Arun Bharat Ram


(DIN – 00694766

Date: May 10, 2016

Place: Gurgaon

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