SRF

The Directors are pleased to present the 37th Annual Report for the
 year ended 31 March 2008.
 
 Financial Results
 
 (Rs. Crore)
 
                                                     2007-08   2006-07
 
 Net Sales                                            1615.3   1802.5
 
 Profit Before Interest, Depreciation and lax (PBIDT)  333.9    555.4
 
 Less: Interest & Finance Charges (Net)                 34.7     35.5
 
 Profit Before Depreciation and Tax (PBDT)             299.2    519.9
 
 Less: Depreciation                                     96.8     76.8
 
 Profit Before Tax (PBT)                               202.4    443.1
 
 Less: Provision for Taxation including 
 Deferred Tax Charge                                    63.7    154.0
 
 Profit After Taxation (PAT)                           138.7    289.1
 
 Add: Profit Brought Forward ;                         358.2    146.0
 
 Surplus available for Appropriation                   496.9    435.1
 
 Appropriation
 
                                                         (Rs. Crore)
 
                                                    2007-08   2006-07
 
 Interim Dividend on Equity Shares                   20.37      27.15
 
 Final Dividend on Equity Shares                     13.58      13.58
 
 Corporate Tax on Dividend                            5.77       6.12
 
 Amount transferred to General Reserve               15.00      30.00
 
 Profit carried to Balance Sheet                    442.20     358.25
 
 Total                                               496.9      435.1
 
 Equity Dividend
 
 Fhe Board of Directors of the Company has recommended a final dividend
 of 20 per cent on the paid up share capital of the Company as on 31
 March 2008.
 
 With this the total dividend for the year works out to 50 per cent on
 the paid up share capital with a total sum of Rs 39.72 crore (including
 tax on dividend amounting to Rs 5.77 crore). Payment of final dividend
 is subject to the approval of the shareholders in the Annual General
 Meeting.
 
 Operations Review
 
 Net sales of the Company decreased by 1 0.38 per cent from Rs 1,802
 crore in 2006-07 to Rs 1,615 crore in 2007-08.  Profit Before Interest,
 Depreciation and Tax (PBIDT), including other income decreased from
 Rs 555 crore in 2006-07 to Rs 334 crore in 2007-08.
 
 Profit Before Tax (PBT) decreased by 54 per cent from Rs 443 crore in
 2006-07 to Rs 202 crore in 2007-08. After accounting for the provision
 on taxation of Rs 63 crore, which includes both fringe benefit tax and
 deferred tax liability, Profit After Tax (PAT) decreased by 52 per cent
 from Rs 289 crore in 2006-07 to Rs 1 39 crore in 2007-08.
 
 Business-wise Review
 
 A detailed business-wise review is being given in the Management
 Discussion and Analysis section of the annual report.
 
 Subsidiary Companies
 
 SRF Overseas Limited (SRFO)
 
 SRFO, a wholly-owned subsidiary operating out of Dubai, is an arm of
 the Technical Textiles Business (TTB) targeted at the markets of Middle
 East, Europe and Africa. Turnover of the Company increased from AED 1 1
 2.94 million in 2006-07 to AED 1 20.65 million in 2007-08. The Company
 earned a net profit of AED 0.88 million in 2007-08 as compared to the
 profit of AED 1 .70 million in 2006-07.
 
 There is no permanent diminution in the value of investment by SRF in
 SRFO considering that net present value of future cash flows of SRFO is
 more than carrying amount of assets as per audited results as on 31
 March 2008.
 
 SRF Americas, Inc. (SRFA)
 
 SRFA, a wholly-owned subsidiary, which has ceased operations in 2005-06
 has been dissolved during the year and investment in the Company
 written off in accordance with RBI regulations.
 
 Other Subsidiaries
 
 SRF Transnational Holdings Limited made a profit of Rs 27.34 lakhs
 during the year 2007-08. This profit was mainly on account of interest
 income.
 
 SRF Properties Limited earned a net profit of Rs 5.31 lakhs during the
 year 2007-08.
 
 SRF Infrastructure Limited has become a wholly-owned subsidiary of the
 Company during the year. There are no operations in the Company.
 
 SRF Fluor Private Limited has been incorporated in Mauritius to act as
 an intermediate holding Company for the purpose of making investments
 in overseas companies. The Company has reported a loss of USD 0.07
 million duringthe year 2007-08.
 
 The Central Government vide its letter No. 47/1 88/2007-CL-lll dated 24
 April 2008 has under Section 212(8) of the Companies Act, 1956,
 exempted SRF from attaching a copy of balance sheet, profit and loss
 account, auditors report and directors report of its subsidiary
 companies and other documents required to be attached under Section
 212(1) of the Act to the balance sheet of the Company.
 
 Directors
 
 Mr. S P Agarwala and Mr Vinayak Chatterjee are retiring by rotation at
 the ensuing Annual General Meeting and are being eligible for
 re-appointment. Brief resumes of the Directors offering themselves for
 re-appointment are furnished in the explanatory statement to the notice
 of the ensuing Annual General Meeting,
 
 Directors Responsibility Statement
 
 Pursuant to the requirements of Section 21 7(2AA) of the Companies Act,
 1 956, it is hereby confirmed:
 
 (i) That in the preparation of the annua! accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures
 
 (ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgements and estimates that were
 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 or loss of the Company for the period under review
 
 (iii) That the Directors have 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
 
 (iv) That the Directors have prepared the annual accounts for the year
 ended 31 March 2008 on a going concern basis The Company is
 controlled by Arun Bharat Ram Group (Promoter Group-) being a group
 as defined under the Monopolies and Restrictive Trade Practices Act, 1
 969. The Promoter Group consists of various individuals and corporate
 bodies who are in a position to and who jointly exercise control over
 the Company. A list of these individuals and corporate entities is as
 follows:
 
 a) Mr. Arun Bharat Ram; b) Mr. Ashish Bharat Ram; c) Mr. Kartikeya
 Bharat Ram; d) Mrs. Shiela Bharat Ram; e) Mrs. Manju Bharat Ram; f)
 Mrs. Vasvi Bharat Ram; g) Mrs. Radhika Bharat Ram; h) SRF Polymers
 Limited; i) SRF Polymers Investments Limited (formerly SRF
 International Limited); j) Skylark Investments & Trading Private
 Limited; k) Narmada Farms Private Limited; and I) Bhairav Farms Private
 Limited.
 
 Buy-back of Shares
 
 Board of Directors at its meeting held on 25 April 2008 had approved
 buy-back of equity shares at a price not exceeding Rs 160 per share
 absorbing an aggregate amount not exceeding Rs 70 crore.
 
 Listing of Equity Shares
 
 SRFs equity shares are listed at the Bombay Stock Exchange Limited and
 the National Stock Exchange of India Limited.
 
 Corporate Governance
 
 Certificate of the auditors of your Company regarding compliance of the
 conditions of corporate governance as stipulated in Clause 49 of the
 Listing Agreement with the stock exchanges is attached to the report as
 Annexure 1.
 
 In compliance with the requirements of Clause 49(V), a certificate from
 Managing Director and the President & Chief Financial Officer.was
 placed before the Board.
 
 All Board members and Corporate Leadership Team (CLT) had 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
 (www.srf.com)
 
 Consolidated Financial Statement
 
 In accordance with the Accounting Standard (AS-21) on consolidated
 financial statements, your Directors are pleased to attach the
 consolidated financial statements, which form part of the Annual Report
 and Accounts.
 
 Accounts and Audit
 
 The auditors, M/s. Thakur, Vaidyanath, Aiyar & Company retire at the
 conclusion of the 37th Annual General Meeting and have expressed their
 unwillingness to seek reappointment. The observations of the auditors
 are explained wherever necessary in appropriate notes to the accounts.
 
 The Company has received a notice under Section 225 of the Companies
 Act, 1 956 proposing that Deloitte Haskins & Sells, Chartered
 Accountants, New Delhi be appointed as the Auditors of the Company.
 
 Cost Audit
 
 Mr. Prakash Kumar Varma, Cost Accountant, has been re-appointed to
 conduct cost audit of the accounts maintained by the Company in respect
 of its nylon products for the financial year 2008-09.
 
 Internal Control System
 
 The Companys internal control system includes audit and verification
 of compliance to defined policies and procedures by Internal Audit
 Function. The internal auditors independently evaluate the adequacy of
 internal controls and audit the sample of the transactions in value
 terms. Independence of the audit is ensured by the direct reporting of
 internal audit function to the Audit Committee of the Board.
 
 Management Discussion and Analysis
 
 A detailed section of the Management Discussion and Analysis forms part
 of the Annual Report.
 
 Fixed Deposits
 
 Your Company discontinued accepting/renewing fixed deposits w.e.f. 14
 August 2004. There have been no defaults in repayment of fixed deposits
 during the year. Deposits (including interest) worth Rs 10.75 lakh due
 for repayment on or before 31 March 2008 remained unclaimed by 65
 depositors.
 
 Personnel
 
 As required by the provisions of Section. 21 7(2A) of the Companies
 Act, 1956 read with Companies (Particulars of Employees), Rules, 1 975,
 as amended, the names and other particularsof employees are separately
 enclosed.
 
 Conservation of Ehergy, Technology Absorption, Foreign Exchange
 Earnings & Outgo
 
 The details as required under the Companies (Disclosure of Particulars
 in Report of Board of Directors) Rules, 1 988 are given as Annexure 2
 to the Directors report.
 
 Acknowledgements
 
 Your Directors acknowledge with gratitude the cooperation and
 assistance received from various agencies of the Central Government and
 the Governments of Madhya Pradesh, Rajasthan, Tamil Nadu and
 Uttarakhand, financial institutions and banks. Your Directors thank the
 shareholders and depositors 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 
 
 Date : 25 April 2008                             Arun Bharat Ram
 Place: Gurgaon                                          Chairman