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Message from the Chairman
On behalf of the Board of Directors, I am pleased to present to you SRF''s annual report 2018-19. It reflects an eventful year in which our employees once again showed great commitment in taking your Company to greater heights.
Diversified Business; Unified Growth
Your Company performed well in FY19, which is largely due to our diversified business model, with all the core business segments delivering an encouraging operating and financial performance in a fast-evolving and volatile global and domestic environment. Viewed from a financial lens, your Company achieved a 39% increase in profit after tax at Rs,642 Crores compared to Rs,6 462 Crores last year. Your Company''s revenue for the year stood at Rs,7,693 Crores as against Rs,6 5,589 Crores in the previous year, recording a growth of 38%, which is very commendable. This has been possible due to the management''s focus in the last few years to strengthen the Company''s foothold through the strategic levers of operational efficiency, adoption of superior technology, the addition of appropriate value-added products to its portfolio and deeper market penetration.
In the year gone by, we realigned our businesses into four segments to enable a clear understanding of our core businesses. Consequently, the Coated and Laminated Fabrics
Business and the Engineering Plastics Business were regrouped as Other Businesses and the erstwhile Chemicals and Polymers Business was renamed as Chemicals Business, which comprises Fluorochemicals and Specialty Chemicals Businesses.
In terms of business segments, the Chemicals Business delivered a healthy performance during the year. In the Fluorochemicals Business, our prudent investments in innovation and technology has made us one of the very few, fully backward integrated producers of Refrigerant Gases in the world, offering the widest portfolio of gases and value-added products to our customers. We continue to maintain a dominant position with the largest market share of refrigerants in the Indian market, while at the same time further increasing the penetration of our FLORON® brand of refrigerants in the overseas markets. The Chloromethane plant at Dahej, which we commissioned in December 2017, is functioning at optimal level, leading to higher sales for the segment. During the year, we also launched a new product in the Indian market under the name, SUPERTRON AC Air Pure. This is a multipurpose product, which keeps the AC system clean and can be used in both car and room ACs. We have also started the commercial supplies of Dymel® F 134a/P, our propellant for asthma inhalers to domestic pharma customers from our cGMP USFDA facility at Dahej. Our site in Dahej has been awarded an EXCiPACT™ GMP for Pharmaceutical Excipient (2017) Certificate from SGS, one of EXCiPACT''s internationally recognized certification bodies.
At SRF, we have a responsibility in creating a sustainable business environment and we continue our journey in finding new ways to adopt good sustainability practices. We are heartened to be recognized for this, with our Bhiwadi and Dahej sites having once again been granted the permission to use the Responsible Care Logo for a period of three years by the Indian Chemical Council (ICC). This underscores our commitment to excellent environmental, health, safety measures that we have in place at our facilities.
About the Specialty Chemicals Business, while the first six months in FY19 were tough, we are now witnessing a revival in the agro-chemicals space, with new product opportunities emerging in both the agro and pharma segments. Along with the revival in the industry, our committed investments in this business are already in place. These include a cGMP plant, a P32 plant, which is our first-ever, most complex Active Ingredients (AI) plant and a P34 plant, which was commissioned in record time, to seize any opportunities that the future may present.
Backed by our strong, differentiated technology play and our endeavor to introduce new products for the innovators of the world, we remain committed to enhancing our product offerings further within our business model. Consequently, we have filed one-hundred and seventy patents to date, of which thirty-three have been granted. I am also happy to share that our customers have appreciated these initiatives and we were honored with the ''Syngenta Supplier Award for Innovation'' at the Syngenta Suppliers Meet, underlining our inherent strengths and capabilities.
In the Packaging Films Business, we continue being an ''Easy to do business with'' partner by delivering excellence in manufacturing, efficiency in supply, and success in customer engagement. Our ongoing investment in our people and manufacturing sites in Thailand and Hungary will ensure we continue to deliver excellence to satisfy the packaging requirements of every customer. Sustainability and innovation are fundamental to our approach in new product development and this year we introduced multiple new products, which have increased our portfolio of value-added products and helped us deliver industry-leading margins. Across all of our operations, we are committed to maintaining a safe work environment and continue to garner accolades for our focus on superior operational performance. Our Indore SEZ facility was bestowed the Sword of Honour and 5-star rating for Occupational Health and Safety from the British Safety Council, which is a first-of-its-kind recognition in the Indian Packaging industry.
The Technical Textiles Business delivered a steady performance during the year despite a challenging operating environment. Our focus on increasing operational efficiency continues to be an ongoing process. With our investments in capacity augmentation across Tyre Cord Fabric and Belting Fabrics segments, we remain optimistic about the future performance of the Technical Textiles Business.
In May this year, we also signed a definite agreement to sell our Engineering Plastics Business. We view this as a strategic step towards focusing on our core businesses where we see larger growth opportunities emerging in the future.
Concerning our community engagement, SRF Foundation and our employees continue to drive initiatives primarily in the areas of education, youth empowerment and natural resource management. SRF Foundation''s flagship ''Rural Education Program'' is marching on successfully. It now covers 269 schools with 78,714 students across 21 locations in nine Indian States. We have a responsibility that we accept and we are making progress in that direction with utmost sincerity.
Our Purpose and Shared Values
It gives me immense pleasure to share with you that this year your Company was conferred ''The Economic Times Family Business of the Year - Large Companies'' Award. The esteemed jury selected SRF on the principles of strong performance and the presence of a stringent family governance framework. We are very proud to have established good governance as the baseline, grow high-potential executives and bring the right discipline to succession and integration processes. These principles unite us by a common sense of purpose and shared values.
The Board of Directors Welcomes New Members
SRF''s Board of Directors appointed three new board members at its recent meeting. As the Chairman of the Board, I welcome Bharti Gupta Ramola, Puneet Yadu Dalmia, and Yash Gupta onto your Board. I am sure that their experience and knowledge will help take your Company to the next level.
Before I conclude, I would like to thank all employees of SRF, the management team and my colleagues on the Board for their hard work and strong commitment. I would also like to thank our customers and business partners for their loyalty and close ties. And, finally, I would like to thank you, our shareholders and investors, for placing your trust in SRF and for supporting us as we execute the next steps in our strategy, and focus resolutely on ensuring that SRF continues to stride ahead.
Arun Bharat Ram