chemicals business sustainability report - srf · responsible employee resource management...

respons ible chemistry

susta inable growth

GRI G3.1 Compliance

Application Level A+

SUSTAINABILITY REPORT2011-13

Chemicals Business

Sustainability Report2011-13

Chemicals Business

4 5Sustainability Report 2011-13SRF Chemicals Business

About the report‘Responsible Chemistry, Sustainable Growth’ is SRF Limited – Chemical Business’ (SRF-CB) fourth biennial Sustainability Report

for the period 1st April 2011 to 31st March 2013. Our communication on progress is based on the GRI G3.1 Sustainability Reporting

Guidelines, and conforms to Application Level ‘A+’. This report is assured by KPMG, according to the ISAE 3000.

The report boundary encompasses SRF-CB’s Corporate Office, zonal offices (Delhi, Mumbai, Kolkata & Chennai) and manufacturing

unit at Bhiwadi. The Company currently has operations only in India. Information on economic, environmental and social performance

indicators and progress of goals is limited to the operations of our manufacturing unit at Bhiwadi. A management disclosure on our new

manufacturing unit at Dahej is included in the section on Sustainable Economic Growth. We intend to include our Dahej manufacturing

Accelerated global warming continues to create an

impetus for artificial cooling. Unidirectional efforts to meet

this demand, combined with steep growth in commodity

markets, unleashed an era of Chlorofluorocarbon

exploitation; until international collaboration resulted in the

launch and universal ratification of the Montreal Protocol on

substances that deplete the Ozone Layer.

Rapid industrialisation, increased disposal incomes and

sedentary lifestyles make us more disease-prone by the

day. Policy interventions and entrepreneurial endeavours

have revolutionised the healthcare sector. This increases the

expectations from the pharmaceutical industry in terms of

availability and affordability of medicines.

The changing climate has impacted agriculture, farmers and

related industries the most, prompting global innovators to

build key business offerings around these solutions. Transfer

of global knowledge to local farmers principally depends

on the efficiency with which custom synthesis of innovative

formulae is undertaken, and ability to scale up production

from lab to plant scale.

The theme of our fourth sustainability report ‘Responsible

Chemistry, Sustainable Growth’ is inspired by these

evolving needs of humans and the widening horizons

of chemistry in sustaining life. Businesses today are

trapped in a labyrinth of risks and challenges arising out

of economic instability, socio-political ambitions and

increased globalisation. It is up to companies like ours

to choose between the conventional bottom-line centric

approach or to take the lead to grow sustainably. We carry

the potential to break this limbo and find a better way for

sustaining people, planet and profit. We are inspired by the

determination to create solutions for the future.

We, SRF Limited – Chemicals Business, continue our

tradition of developing chemistry responsibly whilst growing

in a sustainable manner.

Responsible Chemistry... ...Sustainable Growth

unit in the report boundary from our fifth report onwards. The report boundary does not include joint

ventures, subsidiaries, new facilities under construction, the R&D unit at Chennai, supply chain entities

and other business units of SRF Limited.

There are no changes from the previous report in the scope, boundary or measurement methods. However,

details of restatements of information provided in previous report and the corresponding reasons are

available in the GRI content index or referenced in the applicable section of performance indicators.

All queries regarding the report may be directed to Himanshu Shukla (Associate Vice President – TS,

EHS & Projects) at [email protected].

Energy and Climate Change

Responsible Resource Management

Employee Engagement and Development

Responsible Product Development

Community Engagement & Development

Sustainable Economic Growth

Environment Health and Safety

24 36 44 56

28 40 50

1 3 5 7

2 4 6

4 About the Report

6 From the Managing

Director

8 CEOs Speak

10 Summary of goals &

Performance

11 Highlights

11 Awards and Recognition

12 Business Chemistry

15 Total Quality Management

18 Corporate Governance

20 Stakeholder Engagement

23 Strategic Pillars for Sustainability

62 Assurance Statement

64 GRI Content Index

66 Goals and Targets

66 Glossary

Himanshu Shukla


It gives me immense pleasure to begin this report with some good news.

Last year, the prestigious Deming Prize was conferred on our Chemicals

Business for improving business performance through quality-based

management. This was the result of many years of hard work.

The world today is facing challenging times. With increasing urbanisation,

people’s preference is shifting towards luxurious homes and workplaces, and

reducing the amount of arable land. In view of projected global population

growth, Human Development indicators point towards hunger being more

widespread. Amidst these challenges, is it possible for a Chemical Company

to develop chemicals responsibly and help the world find answers to these

critical problems?

During the reporting period, we leveraged our expertise in handling Fluorine

to develop a wide product portfolio of agro-chemical and pharmaceutical

intermediates. These agro-chemical intermediates in turn participate in

touching millions of farmers’ lives and help them increase the yield per acre,

decreasing water usage and waste generation per crop.

We strived to create a net addition to the ecosystem. Our R 23 incineration

system continues to be operational, despite discontinued financial support

from the Clean Development Mechanism. Resource use efficiency initiatives

not only ensure sustainability of operations but also create trust within the

community, with whom we share our natural resources. The community

is well-fed and catered to through our NRM, Education, Healthcare and

Empowerment initiatives. Also, our workers are happy and satisfied with the

Company’s EHS practices. In short, we are a chemical company operating in

harmonious co-existence with society.

Our experience at Bhiwadi has been overwhelming in terms of the lives

our products touch and the positive impact we have created amongst our

stakeholders. The newly commissioned manufacturing unit at Dahej will be

run on similar principles once it comes out of the project phase and begins

operating stably.

The two business verticals – Fluoro Chemicals and Specialty Chemicals –

offer diverse services and have different business needs. To realise the growth

potential of the Chemicals Business, it is now required that Fluoro Chemicals

and Specialty Chemicals operate separately. Considering this requirement

of focused leadership attention, these verticals are now strategically led by

individual CEOs.

I express my gratitude to all the stakeholders for upholding their trust in

our value system and extending constant support through their continued

association with us. As always, we are committed to developing chemicals

more responsibly, aiding the world in sustainable growth. The current report is

a reflection of our performance towards this commitment.

Ashish Bharat Ram

Managing Director, SRF Limited

From the

Managing Director


How is SRF-CB committed to sustainability in terms of

management attention and investment?

Anurag Jain: Our sustainability journey began with asking simple and basic

questions about our business. For example, our CSR strategy at Bhiwadi

is based on one fundamental question that we asked ourselves – “What

intervention is required to help a person survive and live a fulfilling life?”

The answer that followed translated into a plethora of Natural Resource

Management projects focused at providing access to shared resources like

water, education and led to implementation of empowerment initiatives and

interventions to improve access to primary healthcare. Achieving triple-

bottomline growth in this way is now a baseline scenario for us, and will

continue to receive the highest management attention.

Prashant Yadav: The Company’s legacy, leadership and values lay a strong

foundation for sustainability. Our approach is based on the key material issues

of our business that are further consolidated into seven strategic pillars.

The entire process is more of a self-reflection and is focused at presenting

the facts as they are. During the reporting period, we have achieved good

progress against most of the indicators and have transparently reported on

these. Our commitment to sustainability continues to be close to our heart

and define the path we choose for growth.

What would be the sustainability challenges perceived now as

well as for the next 5 years?

Anurag Jain: For the Chemicals Business, community perception is our

biggest challenge. We are living in a world that finds it hard to believe that a

chemical company and the neighboring community can coexist in harmony.

Our next challenge is the changing technology development scenario.

The risk of technology discontinuity necessitates the Specialty Chemicals

Business to innovate constantly in order to thrive in the pharmaceutical

intermediates and agri-inputs market.

Prashant Yadav: The economy is growing rapidly, both in terms of people’s

aspirations and new business ideas. This is putting enormous pressure on the

environment and creating fierce competition for natural resources. Our major

challenge therefore is to continue to grow keeping in mind the precarious

situation of natural resources. Regulatory phase-out of HCFC-based

refrigerants and rising societal expectations are other significant aspects that

impact our business decisions.

Do you perceive sustainability issues as significant risks or

opportunities for the company’s continued sustenance?

Anurag Jain: Risk and opportunity are two sides of the same coin. In this era

when the paradigms within sustainability are constantly evolving, it is entirely

upon us to convert threats into opportunities. While the Specialty Chemicals

Business could consider changing consumer requirements as a threat of

technical discontinuity, I foresee this as a brilliant opportunity for disruptive

innovation. This is our chance to outdo our performance each year, drive

development of innovative technology, and define newer, leaner, cheaper

and more efficient products. Responsible product development is therefore

a strategic growth pillar for the Specialty Chemicals Business. To quote an

example, the product development team has a KPI in its annual appraisal

that incentivises reduction of waste generated in yields. This, when achieved,

shifts some products’ philosophy from being technically infeasible to viable.

There are external indications like the Deming Prize or CII Sustainability Award

that assess the extent to which sustainability is embedded in our company’s

risk mitigation processes. And we are poised to make strategic decisions and

imbibe behavioural traits that ensure we make chemicals responsibly.

Prashant Yadav: Having identified our biggest growth challenges, we

are proactively mainstreaming resource-use planning in all our expansion

plans. Each of our three-year long business planning cycles has translated

into targets around environmental and social parameters, measurable as a

function of business unit and individual performance. Our goals and targets

have always been aggressive, setting the bar of expectation exceptionally

high. As a result, today, we are one of the few companies in India that has

obtained an ISO 14064-1:2006 certification. We have maintained the water

positive status of our Bhiwadi plant since 2008-09.

The Fluoro Chemicals Business, as part of the phase-out plan, has

launched new grades and blends of refrigerants by leveraging in-house

technological innovations.

What kind of programmes do you expect to implement to comply with the new clause on CSR in the Companies Act?

Anurag Jain and Prashant Yadav: What does Social Responsibility mean to

us? It is just a matter of chance that we are talking about the community not

vice versa. Even before the new regulation came up, SRF has been investing

in various initiatives to address the basic needs of our communities, and we

will continue to do so even in the future, with or without regulation.

What kind of impact does the sustainability performance of your company have on your investors? Does disclosing your

sustainability performance help you inspire confidence among your investors?

Anurag Jain: The audience of this report originate from a diverse cross-

section of stakeholders, a key constituent of which are investors. Investors,

broadly, assess business capability to deliver results, through an evaluation

of the industry landscape, risk-reward interaction, compliance with emerging

statutory needs and readiness for the future. Considering our global operations,

disclosing sustainability performance is a business-as-usual scenario in

many developed country markets. In most cases, contrary to common

belief, publishing a Sustainability Report is one of the enablers for sustained

growth, and not a differentiator. It is this thinking that has embedded the

culture of sustainable growth in all our business decisions. We use our annual

sustainability performance as a tool for internal evaluation and leverage it

for achieving measurable growth. This assessment helps us achieve triple

bottom-line sustainability and tap the benefits of investor preference towards

environmentally-friendly and socially responsible manufacturing operations.

Prashant Yadav: Over the past decade, business and individual awareness

on climate change, Ozone depletion and sustainability has increased

sharply. This has generated greater stakeholder interest in our sustainability

performance. While shareholders and investors are becoming more conscious

of their investment decisions, the proportion of customers’ evaluating our

performance based on ESG indicators is expanding by the day. We are also

answerable to our internal stakeholders and the communities we impact.

The sustainability disclosures of our initial years were targeted towards

investors. But over a period of time, all our stakeholders have displayed a

forward-looking approach. Today, they understand the connection between

environmental impact, social sustainability, financial returns and economic

performance, and appreciate our efforts on these dimensions.

Anurag Jain

President & CEO

Specialty Chemicals Business (SCB)

Prashant Yadav

President & CEO

Fluoro Chemicals Business (FCB)

CEOs... ...speak


Summary of goals and performance

Goals (2011-12) Status Goals (2012-13) Status

Energy and climate change Energy and climate change

Reduction in absolute energy consumption by 5% Reduction in absolute energy consumption by 5%

Reduction in Scope 1 GHG emissions by 6% Reduction in Scope 1 GHG emissions by 6%

Reduction in Scope 3 GHG emissions by 24% Reduction in Scope 3 GHG emissions by 24%

Community development Community development

By 2015, reach 6500 families through NRM, increase their income by INR 10,000 annually

By 2015, reach 6500 families through NRM, increase their income by INR 10,000 annually

Responsible resource management Responsible resource management

Reduction in waste generation by 10% Reduction in waste generation by 10%

Reduction in specific water consumption by 2% Reduction in specific water consumption by 2%

Sustainable economic growth Sustainable economic growth

Increasing the Choloromethanes plant capacity to 50,000 TPA

Continue 2011-12 target, if not achieved

Increasing the HFC 134a plant capacity to 12,000 TPA Continue 2011-12 target, if not achieved

Increasing the fluoro specialties plant capacity to 3,000 TPA

Continue 2011-12 target, if not achieved

Employee development Employee development

Reduction in employee turnover to 10% per annumMaintain employee turnover at less than or equal to 10% per annum

Reduction in employee unplanned absence to 1% of available man-hours of work

Reduction in employee unplanned absence to 1% of available man-hours of work

Provide 40 man hours of training per employee per annum

Provide 40 man hours of training per employee per annum

Increase skill enhancement of junior management (skill index) by 10%


Achieve employee satisfaction levels of 75% Achieve employee satisfaction levels of 75%

Health and safety Health and safety

Limit first aid injuries to 24 per annum Limit first aid injuries to 24 per annum

Ensure zero reportable injuries Ensure zero reportable injuries

Provide 12 man-hours of EHS training per employee per annum

Provide 12 man-hours of EHS training per employee per annum

Responsible product development Responsible product development

Launch new product packaging for R 134a cansContinue to make R&D investments for products & packaging material

Awards and Recognition

Highlights

2011-12

• Commendation Certificate for Significant

Achievement, CII-ITC Sustainability Award 2011

• Shikshak Shri Samman awarded by District

Education Department

• State Award for Export Excellence, Government

of Rajasthan

• Supplier Sustainability Award, Bayer Crop

Sciences

2012-13

• The Deming Application Prize, Union of Japanese Scientists and

Engineers, 2012

• Global Sourcing Award of Recognition, Syngenta AG

• Rajasthan State Bhama Shah Award by

Department of Education,

Government of Rajasthan

• CII-ITC Sustainability Prize, 2013

• Responsible Care re-certification, 2013

CII-ITCSustainabilityPrize,2013TheDemingPrize,2012

• Prestigious Deming Prize conferred for improving business

performance through quality-based management

• Fluoro Chemicals (FC) and Specialty Chemicals (SC)

operations separated to be able to offer diverse services and

will be led by individual CEOs

• A new Chemical complex at Dahej (Gujarat) successfully

commissioned in 2012-13

• 16% reduction in Scope 1 GHG emissions in 2012-13

• 150% increase in crop yield with improved

agriculture practices and 300% increase in

family income after Land Leveling

• Drastic reduction in school dropout

rate from 53% to just 6% now, especially

for girls

• 30 units of toilets and bathrooms

constructed, improving the health & hygiene

condition in the project villages

Managementsystemsandcertifications

• Integrated Management System (ISO 9001, ISO 14001 & OHSAS 18001), 2012

• SA 8000, 2012

Complete Approx 75% Complete Approx 50% Complete Continuing

Global Sourcing Award of Recognition, Syngenta AG, 2012


ASPIRATION 2020“We aspire to achieve global leadership by continuously enhancing organisational and people capability, developing innovative products and processes that satisfy customers and attaining challenging benchmarks in productivity.”

VALUESWe are driven by our strong value system (RINEW) which guides us to demonstrate R espect I ntegrity N on-discrimination E xcellence W ell-being

SRF is a leading Indian multi-product industrial group engaged in Technical Textiles, Chemicals, Packaging Films and

Engineering Plastics. With a large portfolio of Fluoro Chemicals and Specialty Chemicals, SRF’s Chemicals Business caters

to diverse applications across industries. Visionary leadership, strong focus on quality, robust management systems and

committed employees drive the growth of our business verticals – Fluoro Chemicals and Specialty Chemicals. We have

grown to be a preferred supplier of refrigerant gases and chloromethanes to major Pharma and Agrochemical manufacturers

of the world. Our strong knowledge of Fluorination and other halogen chemistry along with concerted focus on R&D has led

to commercialisation of Ozone-friendly refrigerants – HFC 134a on the one hand and the development of complex organo-

fluorine compounds on the other.

Our diverse product range, competitive prices and customer-centric approach make SRF a stable and credible player in the

international market. The Business enjoys a market share of approximately 40% for refrigerants in India, whereas exports of

the Business are spread across 60 countries worldwide. Refrigerant exports account for over 60% of the volumes produced.

Our Specialty Chemicals Business is the preferred supplier to global chemistry innovators. Four out of thirteen Specialty

Chemicals occupy the first position in the market, in terms of quality and supply. Our customers are spread across Asia,

Europe and North America.

Business Chemistry

New Chemical Complex at DahejIn the year 2012-13, we successfully commissioned the new world-class chemical complex at Dahej in Gujarat. The new

plants in the complex have been designed and executed with in-house technologies, leveraging our exceptional R&D

and project execution capabilities. The Business is currently focusing on enhancing and enriching the basket of specialty

chemicals and enabling backward integration of raw materials. During 2013-14, the Business is expected to derive value

from the new chlorinated solvents being manufactured at this facility. In addition, the investment in a new HFC 134a/125

plant at Dahej will come up by the end of 2013-14. The upcoming plant will be backward integrated

with a global-size HF plant to meet the production need.

Fluoro Chemicals

HCFC 22

HFC 134a

Blends

Methylene Chloride

Chloroform

Anhydrous Hydrofluoric Acid

RefrigerantsChlorinated

solventsOthers

2,3,5,6 Penta fluoro Benzile Alcohol

EDFA - Ethyl Difluoroacetate

ETFAA - Ethyl Trifluoroacetoacetate

Aminocrotonate

Ethyl Difluoro Acetoacetate

PFBA - Pentafluorobenzoic acid

PBFB - P - Bromo Fluoro Benzene

Methyl Chlorodifluoro Acetate

Chloro Difluoro Acetic Anhydride

Specialty Chemicals

Agro Pharma Agro & Pharma

TFA - Trifluroacetic Acid

ETFA - Ethyl Trifluoroacetate

KF - Potassium Fluoride

Trifluoro Acetic Anhydride

Our products

New Chemical Complex at Dahej


Purpose of TQM

TQM was chosen as the Management Way for

SRF in 1991 and adopted by the Chemicals

Business in 1995. Having adopted our vision

of ‘being a credible global player’, it became

imperative that we deal with the following

challenges:

• Having strong customer orientation to

understand customer needs on Quality,

Cost and Delivery.

Total Quality ManagementOn our journey to global leadership in Chemicals Business

• Hazardous nature of plant operations required a high orientation

towards safety systems with involvement of all employees.

• Becoming a global player in view of intense international competition

required the Business to upgrade its quality levels whilst being cost

competitive. We believe that TQM is the only way which will allow us

to overcome the above challenges, and will also speed up our quest

to become a credible global player in our chosen field.

“For years now, we have

been continuously spreading

knowledge on TQM. People’s

involvement during Deming

preparation was overwhelming.

The award of the Deming Prize

is a moment of celebration

since our efforts have been

recognised at a global level. We

feel motivated, more than ever,

to keep the enthusiasm going…”

- Neeraj Chandna AVP, TQM

The Deming Prize, established in honor of W. Edwards Deming,

recognises individual and organisational contribution in the

advancement of quality. Awarded by the Union of Japanese Scientists

and Engineers (JUSE), the Deming Prize is considered the Nobel

Prize equivalent in the world of quality. In November 2012, SRF

Chemicals Business received its first Deming Prize, which is the second award for

SRF Limited. Earlier, in 2004, the Tyre Cord business of SRF had won the Deming

Prize. We take immense pride in the fact that the SRF Group is a recipient of two

Deming Prizes, the latest being for the Chemicals Business.

The special comments of the jury stated that the coveted Deming Prize was

awarded to the Chemicals Business in recognition of its effective implementation

of TQM in shop floor operations and Kaizen activities. In addition, the TIE Group

activities undertaken by cross-functional teams were stated as a salient feature.

This is a significant achievement considering that hazardous materials are being

handled in large quantities by the shop floor personnel. The second salient

feature is the proactive identification of opportunities for de-bottlenecking to

improve product throughput. Additionally, the safety related initiatives, precise

monitoring of key performance indicators like reportable injuries and severity

rate, differentiates the Chemical Business from other applicants.

Our financial front

Parameter 2011-12 2012-13

Revenue (INR Million) 10,921.53 8,109.28

Profitaftertax(INRMillion) 5,867.85 3,398.29

Number of employees (Permanent &

contractual)

1,169 1,088

Employeewagesandbenefits(INRMillion) 297.24 349.90

Payments to providers of capital (INR

Million)

808.70 566.80

Payments to government (INR Million) 491.05 547.74

Community investments (INR Million) 20.20 19.20

Number of shareholders (SRF Limited) 62,146 63,351

Fluoro Chemicals Specialty Chemicals

SAUDI ARABIA UAE

USA

CHINA

JAPAN

BELGIUM

TURKEY

EGYPT

2011-12 2012-13

Sales (MT) 936.68 589.28

Revenue* 132.76 53.70

2011-12 2012-13

Sales (MT) 311.9 391.00

Revenue* 291.58 464.75

2011-12 2012-13

Sales (MT) 49.67 58.50

Revenue* 71.77 92.02

2011-12 2012-13

Sales (MT) 45.02 147.00

Revenue* 62.15 74.57

2011-12 2012-13

Sales (MT) 739.12 518.30

Revenue* 139.66 64.97

2011-12 2012-13

Sales (MT) 966.45 738.82

Revenue* 181.67 80.48

2011-12 2012-13

Sales (MT) 265.06 124.78

Revenue* 157.19 182.23

2011-12 2012-13

Sales (MT) 2425.10 2628.32

Revenue* 492.07 343.06

Note: The map shows top four export destinations for FY 2011-12 and 2012-13.

* INR Million


Levels of Improvement

Our improvement system is at three levels. A large number

of bottom-up improvements called Kaizens are made by

the majority of people using observation skill on routine

problems. The chronic problems are solved using a

structured methodology which we call Problem Solving

Process (PSP). This is similar to QC story. We also have a

methodology called PSP-II which is similar to Task Achieving

QC story. In case of tasks for which solutions are known,

‘Execution Theme’ methodology is applied.

In 2003, a problem solving certification system was introduced. The system requires two graded projects, two assignments

and a test for individual certification. The current implementation model for training and facilitation for PSP program is shown

above. All engineers participate in problem solving and make A3 summary reports of the projects taken.

Evaluation of TQM Status

Evaluations are done by the CEOs to provide

guidance for implementation. Since 2003, we have

received 8 diagnoses by Prof. Hitoshi Kume, which

have helped shape our improvement journey.

Learning from our own methods in 2010, a new

comprehensive system of management diagnosis

with 14 elements was introduced specific to

the Chemicals Business to evaluate status of

organisational capability. The Business Leadership

Team (BLT) carries out the final departmental

audits using a scoring methodology. In the first

diagnosis, the business scored 66 on a 100 point

scale (A score of 50 reflects proper maintenance

and continuous improvement system in place with

requirement of some breakthrough efforts). The

diagnosis, including JUSE diagnosis, has helped

identify critical issues to be taken for annual

business planning.

TQM Education

Training has always been internally designed

and delivered in conjunction with the corporate

TQM team. The topics include basic TQM,

5S, Kaizen, AM and TIE functioning. Training

on annual planning system is done during the

annual planning cycle. Candidates enrolled

in PSP certification are provided 71/2 days of

training and facilitation while working on projects.

Training on specific tools like FMEA, FTA and

PDPC, etc., is provided as needed.

Effects of TQM

With the thrust on TQM as our ‘Management Way’, the Business has benefited in the following ways:

• Increased customer orientation, resulting in expansion of both, Fluoro Chemicals and Specialty Chemicals Businesses

• Improved employee capabilities through standardisation and problem solving, resulting in many innovations involving

methods, material, machine and men

• Improved goal deployment, resulting in our ability to challenge higher goals as a business

8. Reflect

2. Understand present situation

3. Analyse the causes

4. Find solutions

5. Implement the solutions

6. Verify results

7. Standardise and establish control

Tools

Tools + Assignment!

Batch Selection – Team + Themes from annual plan

Test + Project 1 Presentation

Presentation of Project 2

Award of certification and Plaque

Eight steps of PSP methodology

1 day

3 days

2 days

1.5 days

1. Select the theme

6 to

8 M

ont

hs

6 (PSP Silver)

Levels of ImprovementsCumulative Improvements

(till Mar’13)

73 (PSP Blue)

46,889

PSP Silver

PSP Blue

Execution Theme

Kaizens by TIE Groups

+

Management and Technology System

Cross functional Effects

Leadership, Strategy and Structure

Quality Assurance QCDSM - CSR

Maintaining (DM) ProfitManagement Product and brand Power

Improving (PSP) Quality and Delivery Control

Sustainability (environment)

Annual Planning SHE

Innovations and Breakthroughs

People Management

Equipment Management

14 Process elementTechnology

Use of I.T. data

CSR

TQM Implementation Framework

Chemicals Business’ TQM framework is adapted from SRF’s TQM framework. As shown below this has some unique features:

The way we manage

Management Systems Cross Functional Management

Diagnosis

Improvement Hierarchy

1. TIE Groups2. Daily Management3. Breakthrough Management4. Social Responsibility

1. Quality Assurance2. EHS Management3. Delivery Management4. Product and Process Development5. People Management6. Cost Management

PSP Silver

PSP Blue + Execution Themes

Kaizen

The way we think, and do things

Maintain, Improve, Transform

Teamwork and cooperation

Thoughts Work Habits

1. Quality first, not short term profits

2. Market in, not product out3. Next process is customer4. Purpose orientation5. Enabling people realize potential

Skills1. Functional2. People3. Business

Tools1. Statistical2. Language

1. Working with facts, Gemba2. Deep search for causes3. Prioritisation4. Standardisation and

documentation5. Control upstream

AAct

PPlan

DDo

CCheck

Sustainability: People, Planet, Profit

CB People Customers SocietySRF + Regulators

• Experiencing• Learning• Contributing• Growing

• QCDS results• Awards and

recognition

• Returns• Risk mitigation• Compliance to laws• Corporate governance

• Quality• Cost• Delivery

• Environment• Community

partnership• Employment

Top Management Conviction and Leadership

Purpose: Win-Win for all

Effects

Organisational Capability, Technology Power

G

C

E

L

Q

D C

E

CP Em

NoofEmployeesPSPBlueCertified-Cumulative

3

21

32

52

67

78

10

30

50

70 70

90

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Actual Planned

TQM Training - Cumulative (No of Hours)

1893 4112

7948

10775

15025

17791

2000

4000

7000 9000

11000

13000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Actual Planned

Types of PSP Projects

Productivity improvement

35%

Energy Conservation

27%

Raw Material Conservation

21%

Quality Improvement

9%

EHS 5%

Water Conservation

3%

Chemicals Business has a system for certifying people for

their problem solving ability. There are 2 levels of certification:

• PSP blue is the basic level and includes the 7 QC tools

• PSP silver is an advanced program covering tools such

as design of experiments, PDPC, FMEA, etc. PSP silver

certified people tackle complex problems

The levels of improvements are shown below:


Business and the Board SRF Limited is governed by a 9 member Board

of Directors (6 of them independent) who guide/

supervise the Business at the SRF Group level.

Each Strategic Business Unit of SRF has its

own leadership team. As such, the Chemicals

Business also has its own Business Leadership

Team (BLT) which is supported by 9 Cross-

Functional Teams for a focused approach on

Quality, Cost, Delivery and Sustainability. The

Company has a full-time Director to look after the

issues related to Health, Safety & Environment.

In the recent past, the Group in general and

the Chemicals Business in particular have

witnessed significant organisational changes.

The SRF Group inducted 6 new CEOs to the

Corporate Leadership Team with effect from 1st

August 2013. Now, the Chemicals Business is

Corporate GovernanceAt SRF, good governance is synonymous with adoption of

best practices to ensure that the company operates not

only within the regulatory framework, but is also guided by

business ethics.

The Corporate Governance framework adopted at

SRF Limited encompasses a significant portion of

recommendations under ‘Corporate Governance Voluntary

Guidelines 2009’ issued by IICA. SRF has a broad-based

Board of Directors and there is a clear separation of

Board’s supervisory role and the executive management

of the company. It has instituted a ‘Code of Conduct’ for

prevention of Insider Trading and various Board committees

have been constituted with independent Directors.

Code of ConductSRF Limited’s Code of Conduct provides guidance

regarding ethical behavior, transparency, accountability,

anti-corruption, discrimination and anti-bribery. Management

systems implemented around these aspects, including

SA8000:2008 certification, ensure that appropriate controls

are implemented. Stakeholders, specifically employees, are

well informed of grievance redressal mechanisms instituted

for shareholders, employees, customers, suppliers and

local communities. The Business takes pride in the fact that

during the reporting period, there were no reported incidents

of discrimination, unethical behaviour, corruption or violation

of human rights, and remains committed to adopting the

highest standards of business ethics.

Business RisksStrong internal controls implemented as part of the

Governance mechanism help the Business identify and

mitigate significant risks arising out of the nature of the

Business and the changing regulatory landscape. This

control system works on three primary principles:

• The planning system that builds a goal-oriented mindset

and draws out action plans for fulfillment of targets

• The risk assessment system through which significant

risks or threats are dealt with, and, mitigation strategies

and contingency plans made

• The review system for regular monitoring, evaluation

and reporting of irregularities, implementation of remedial

measures in case of strategy deviation

The risk identification process is overseen by the senior

management. The outcome is discussed with the Board

of Directors, subsequent to which high priority mitigation

measures are incorporated into the Company’s strategy and

yearly action plan.

divided and operates as two separate businesses, Fluoro Chemicals and

Specialty Chemicals, led by individual CEOs.

The Board of Directors has complete access to all relevant information on

the Business, Inter alia, the following information is regularly provided to

the Board for guidance and approvals:

• All strategic investment proposals for sustainable business growth and

continuity including R&D spend

• All materially important show cause, demand, prosecution and penalty

notices

• Any fatal or serious accident, dangerous occurrences, any material

effluent or pollution problems

• Any issue which involves possible public or product liability claims of

substantial nature

• Any significant development in the sphere of human resources/

industrial relations

The Board also reviews quarterly, the compliance reports of all laws applicable

to the Business, as well as steps to rectify instances of non-compliance.

(Givesvision&directiontothebusiness,coordination&conflictresolutionatthehighestlevel)

(Ensuressmoothandsafeplantoperationwithfocusonsafetyandproductivityimprovements)

(Ensuresembeddingofsustainabilityofoursystems,peopleandprocesses)

Rajeev Marwah

Sr. Vice President Head of Operations

& Projects

R N Kaul

Sr. Vice President Sourcing & Regulatory

Affairs

Sanjay N Mathur

Sr. Vice President Sales & Marketing

(FCB)

Anurag Jain

CEO & President Specialty Chemicals Business

H S Dua

Associate Vice President HR & CSR

Umang S Bhatnagar

Associate Vice President Strategic Sourcing (New

Products) & BPD

Sunil Gulpadia

Sr. Vice President Finance & IT

Prashant Yadav

CEO & President Fluoro Chemicals Business

Business Leadership Team

Strategic risks

arising out of industry

performance, technological

upgrades and changing

customer requirements

Operational risks

arising mainly out of

technological discontinuity

and capability gaps of new

employees

Financial risks

primarily arising out of the

fluctuating foreign currency

exchange rates

Other risks

including environmental,

societal and geo-political

risks

Strategic decisions undergo

a thorough evaluation

for potential risks and

threats. Wherever relevant

changes in the governance

structure, operating model

and go-to-market strategy

are implemented

Robust implementation

of the Total Quality

Management System that

empowers employees

with requisite policies,

processes, procedures and

technological tools to ensure

customer satisfaction

Be guided by a

conservative foreign

exchange risk management

policy to limit financial risks/

losses. Critical imports

and exports are overseen

by our Strategic Sourcing

department

In accordance with the

GRI G3.1 guidelines,

we undertake regular

assessment of

material issues around

environmental, social and

economic impacts of the

Company & vice versa. The

mitigation measures for

these risks and progress

is reported through our

biennial Sustainability Report

RIS

KS

MIT

IGA

TIO

N A

PP

RO

AC

H


Stakeholder inclusion and ongoing engagement provide critical inputs to formulate our growth strategy. We

strongly believe that business success depends on the prosperity and well-being of our stakeholders.

The ongoing engagement methodology includes listening to stakeholders’ views and opinions,

identifying and including their concerns and suggestions in our decision-making processes and

providing timely responses. The business’ growth and success is dependent on our performance against

seven strategic pillars that are drawn from our key material issues.

Stakeholder Engagement

We have prioritised our stakeholders through rigorous management driven discussions into six categories, namely,

shareholders/investors, customers, suppliers, employees, local communities and regulatory authorities. The engagement

process encompasses identification of primary and secondary stakeholders, development of influence-dependency matrix,

prioritisation and finalisation of engagement approaches.

Value Creation Mindset• Identify compliance-related concerns, if

any, in our business activities

• De-risk our strategy and operations in

view of financial, environmental, social,

geopolitical and reputational risks

• Proactively identify prospective issues,

incorporate suggestions into tactical

business planning approach

• Integrate new thought processes,

ideas, business and operational models

into strategic planning, enhance value

creation and mutual benefits

We are open and transparent in our communication with stakeholders and follow appropriate modes of engagement for

different stakeholder groups.

Indicative stakeholder engagement methods

Communication Consultation Dialogue Partnerships with

• Information sharing

• Training programmes

• Marketing material (Brochures, publications, reports, newsletters, website updates)

• Questionnaires

• Surveys

• Focus group discussions

• Meetings with customers, suppliers and community representatives

• Multi stakeholder forums

• Leadership Summits hosted by organisations like CII, advisory panels

• Academic institutes, specifically for new product development

• NGOs and government agencies for community projects

The learnings from these engagement programmes are shared internally for ongoing monitoring and subsequent material

issue identification.

Summary of Stakeholder Engagement

Stakeholder Mode and frequency Aspects discussed

Shareholder, Investor

• Annual and quarterly meetings to discuss financial performance

• Need-based interaction as part of grievance redressal mechanism

• Biennial Sustainability Report

• Financial performance and business growth

• Business risk management

• Strategic planning, entry into new product, geography or market segment

• Optimising operational costs

• Raw material availability

Customer

• Annual customer satisfaction survey

• Regular written & oral feedback

• ‘Floron Days’, One to One Contact Programme

• Feedback during manufacturing/R&D unit site visit

• Customer’s supplier recognition/awards programmes

• Biennial Sustainability Report

• Product innovation and life-cycle efficiency

• Service quality and turnaround time for service requests

• Customer complaints resolution, ensuring high satisfaction

• Quality and safety of products, packaging material and transportation

• Product pricing and availability

Supplier

• Regular vendor/supplier evaluation

• Quarterly meetings with significant suppliers

• Site visit by supplier

• Site visit to supplier facility

• Raw material pricing, availability & reliability (contracting for long-term supplies)

• Service quality and complaint resolution time

• Human rights issues

• Quality and safety of raw material, packaging material and transportation

Employee

• Annual performance appraisal discussions

• Identifying concerns and areas of improvement through People Redbook System

• Annual employee feedback surveys

• Annual training needs assessment

• Regular interactions by Safety Committee, Management Review of the Integrated Management System

• Complaint/suggestion box/grievance redressal mechanisms

• Quarterly CEO Communication meetings

• Daily TIE Group meeting

• Employee growth prospects, mapping with business performance

• Learning and development requirements

• Reward and recognition

• Occupational health and safety

• Work environment & policies

• Grievance redressal

• Ethics, transparency and anti-corruption

Local community

• Pre-project needs assessment studies

• Regular interaction for implementation of programmes

• Partnership with NGOs for project planning, implementation and impact assessment

• Quarterly impact assessment studies

• Social impact assessment and formal public hearings for environmental clearance of new projects

• Social concerns in the region – education, empowerment, healthcare facilities, infrastructure development and sustainable livelihood options for the poor

• Minimising the negative environmental impact of our operations

Regulatory authority

• Indicator/parameter based monthly or annual regulatory compliance reports

• Annual review meetings for renewal of statutory clearances

• Participation in public policy advocacy programmes through industry consortiums (CII, FICCI, etc.)

• Regulatory compliance

• Operational efficiency

• Community development and managing environmental impact

We diligently direct our efforts towards continuous improvement of our stakeholder engagement process. Our risk–reward

SRF-CB’s approach to stakeholder engagement


It is our strong belief that organisational

sustainability is an evolving process that is

governed by the mega forces of development.

Our inclusive stakeholder engagement process

for determining material issues considers these

mega forces and prioritises them according to

the immediate, short and long-term ambitions

of the Business. In 2009, we launched the

concept of strategic pillars through which

we define, monitor and achieve sustainable

business outcomes.

Importance to Company

Strategic pillars(Reported through key performance

indicators)

Risks and opportunities(Reported through management

disclosure)

Long term vision(Not reported)

Imp

ort

ance

to

Sta

keho

lder

s

W. Edwards Deming’s fourteenth principle of management says “Put everybody in the company to work to

accomplish the transformation. The transformation is everybody’s job”. As a recipient of the Deming Prize, one

of the world’s most prestigious quality performance awards, we reiterate this principle, and diligently follow a

participatory approach to transformation. Accordingly, each of our organisational functions and departments

take direct responsibility for achieving the targets set out under strategic pillars.

Strategic Pillars for Sustainability

The environmental, economic and social impacts of the Business

are derived out of identified material issues from seven overarching

strategic pillars. This process is overseen by the Sustainability

Leadership Team and approved for implementation by the Top

Management. Our outlook towards ensuring sustainability in operations

is strengthened by our pillar-wise action plan to achieve results against

stated environmental, economic and social goals. Each departmental

function in the Company commits to targets against relevant strategic

pillars and ensures that delivery responsibilities are funneled down to

individual employee performance.

Seven Strategic Pillars


Emissions,renewableenergy,energyefficiency

Community Development

Benefitsharingandsocialinvestments

Responsible Resource

Management

Waste&watermanagement,TotalQualityManagement,productsafety,transportsafety

Sustainable Economic

Growth

Rawmaterialavailability&

pricing,BusinessRiskManagement,

growth

Employee Engagement and

Development

Successionplanning,

employeegrowth,valuesinculcation,laborconditions


Emergencypreparedness,OccupationalHealth&Safety

Responsible Product

Development

Productperformance,safety,R&D

1 2 3 4 5 6 7

evaluation of business drivers is based on stakeholders’ issues and materiality assessment. This assessment undergoes

rigorous internal evaluation through focus group discussions with technical experts and specialists within the Company.

Occupational Health and Safety

Product Safety during Transportation

Biodiversity and Resource conservation

Financial Performance and Growth

Air and GHG Emissions

Business Risk Management

Emergency Preparedness Total Quality Management

System

Raw Material-Availability and

Pricing

Ethics and Values

Regulatory compliance

Water Consumption and Discharge

Energy Efficiency

Product Innovation, R&D

Employee Development and Growth

Community Engagement and Development

Use of Renewable Energy

Branding

Very highHigh

Hig

hVe

ry h

igh

Ext

rem

ely

high

Extremely high

Labour Conditions

Waste Management

Local Employment

Importance to Company

Imp

ort

ance

to

Sta

keho

lder

s

25Sustainability Report 2011-13

Coal (MT) Mustard husk (MT)

Wood chips (MT) LSHS or Furnace oil (MT)

High speed diesel (KL)

58,1

42

17,8

83

2,65

9

2,39

2

791

65,2

44

20,0

28

1,59

4

2,16

6

697

2011-12 2012-13


We understand the importance of energy and proactively undertake energy efficiency and emission reduction activities.

During the previous reporting period, 2009-11, we undertook a rigorous energy assessment and GHG verification activity

to identify potential areas of improvement. Through technological interventions, changes in procedures and leveraging on

market mechanisms, we have achieved significant progress in achieving our targets.

Summary of Progress in 2011-13Target Yearly target Progress 2011-12 Progress 2012-13

ReductioninspecificScope1GHGemissions

6% 4.84% 13.74%

ReductioninspecificScope2GHGemissions

- -23.5% 14.3%

Energy saved (kWh) 5% 1.5% 1.1%

Fuel saved (kl) 5% 3.67% 4.3%

EnergyThe availability and pricing of energy is of critical importance for our operational stability. We have diversified our electricity

sourcing portfolio to include low-carbon and renewable energy sources. The captive power plant, which caters to a

significant portion of the manufacturing unit’s power and steam requirements, also uses mustard husk and wood chips as

fuel. A snapshot of our energy sources and amount consumed is provided below. We periodically monitor our performance

against these indicators and strive to benchmark efficiency against industry best practices.

1 The burgeoning effects of climate change significantly impact our business sustainability.

We understand our energy intensive processes and the criticality of energy availability for business growth.

In view of this, the materiality assessment this year includes renewable energy as a medium material aspect,

in line with the long term view of the management.

Direct Energy Consumption Indirect Energy Consumption

Regular monitoring of the energy consumption patterns has resulted in identification of various energy saving initiatives.

Accordingly, we take yearly targets for reducing consumption of thermal and electrical energy. The internal utilities

department organises a thorough energy performance review annually, and commits to reduction targets. During the

reporting period, energy reduction targets for both electrical and thermal energy were taken and the following energy

conservation initiatives were implemented.


2010-11 2011-12 2012-13

0.017

0.021 0.018

2011

-12

Initiatives

2012

-13

Initiatives

• Installation of water emulsification system in

HOG unit of HFC plant (Savings in INR: 38.72

lakh/annum)

• Installation of 14 Variable Frequency Drives in

pumps (Savings in INR: 16.56 lakh/annum)

• Replacement of 4 CPP cooling tower fan blades

by FRP (Savings in INR: 15.84 lakh/annum)

• Installation of solar water heater for canteen

(Savings in INR: 0.31 lakh/annum)

• Use of FO in place of HSD (Savings in INR: 55 lakh/

annum)

• Optimisation of FS plant utilities by installing VFDs in

cooling water (Savings in INR: 6.9 lakh/annum)

• Installation of 18 kW cooling water pump; shut down 75

kW for rotary UPS (Savings in INR: 4.94 lakh/annum)

• Replacement of Fluorescent Lamps with CFLs

(Savings in INR: 3.95 lakh/annum)

Our Absolute Scope 1 emissions in 2011-12

increased due to a major shut down suffered

by the HFC 134a plant, maintenance activities

for which consumed a significant amount of

furnace oil. However, ongoing efforts to reduce

emissions resulted in reduction of Scope 1

emissions by 16% in 2012-13 over 2011-12.

Scope2Emissions(tCO2e) SpecificScope2Emissions (tCO2/MT of production)During 2011-13, we were unable to fully achieve either the thermal or the electrical energy reduction target. This is attributed

to the fact that for past many years we have been working on rolling target of energy reduction which is making it difficult

to find new saving avenues every successive year. Therefore, now we have also included thermal energy reduction targets

along with electrical energy reduction targets.

We are also exploring alternate fuel use options which not only improve bottom line of the organisation, but also reduce the

environmental impact.

2010-11 2011-12 2012-13

0.558 0.531 0.458

SpecificScope1Emissions (tCO2/MT of production)

*

Scope 1 Emissions (tCO2e)

2010-11 2011-12 2012-13

100,935

114,586

96,787

*

#

* Increased on account of preparatory activities for commissioning of units # In our previous Sustainability Report 2009-11, this date was erroneously presented as 92,610

* Increased on account of HFC 134a plant shutdown

Our Captive Power Plant in Bhiwadi manufacturing unit uses a biomass

boiler where mustard husk and wood chips are used as fuel to generate

steam. In 2011-12, over 25% of the fuel used in the captive power plant

comprised of biomass resources, and in 2012-13 the same was 24%.

In 2010, the Bhiwadi manufacturing unit had obtained a certification

for ISO 14064:2006 Verification of GHG emissions. Through this study,

many potential emission reduction measures were identified out of which

the following were implemented:

• Increasing the proportion of biomass used as fuel for steam

generation

• Periodic performance evaluation of efficiency of existing DG sets

for optimum operational efficiency (performed through internal

evaluations)

• Working upon the set GHG reduction targets through low/no-

investment energy efficiency measures

As a long-term vision, a need has been felt to integrate GHG data

accounting and monitoring into the ERP system and this integration is now

a long-term goal in the organisation.

We had recently upgraded the ERP system

to Oracle R 12, which had a data migration

gestation period of about 6 months.

Furthermore, due to the same reason, the

carbon footprint data for the year 2012-13

could not be captured comprehensively, which

resulted in incomplete data availability for

estimating our Scope 3 emissions. We take this

issue seriously, and are considering alternate

options to ensure robust data management and

reporting in future.

“Our integrated IT system has given

us more flexibility to accurately

monitor energy and emissions.”

- Mahesh Agrawal, AVP (CPP)

EmissionsOur two-pronged strategy to reduce organisational emission intensity entails inclusion of renewable energy sources in our

energy procurement practices and leveraging on market mechanisms to offset emissions through carbon credits. While the

former contributes to economic development by adding a financial value to resources like biomass, the latter strengthens

India’s position as an active member of international climate change mitigation negotiations and creates a means for

technology transfer into the country.

Parameters Unit of Measurement 2011-12 2012-13

Air emissions

ODSConsumption(R22) Tons of CFC-11 eq. 1.1 0.9

PM Emission MT 2.63 3.44


Our community engagement journey began in 2005 and has achieved meaningful progress against set targets. We work

along four primary focus areas, namely Natural Resource Management for improving livelihood, Education, Community

health and Women empowerment. These initiatives are implemented through partnerships with reputed NGOs. PRADAN

& SST implement watershed-based Integrated Natural Resource Management (INRM) project, SPACE conducts its impact

assessment and SARD works on health and education programmes.

Sustainable Livelihood Development through Natural Resource Management (NRM)

Community Engagement and Development

2 The Community Outreach and Engagement Programme is aimed at seeking proactive feedback and being

responsive to the changing needs of local communities and the society at large. Through sustainability efforts,

we focus on CSR vehicles that advance learning and development, facilitate access to education, improve

quality of life and protect environmental resources. The commitment to serve the communities is translated into

action through a number of initiatives. While planning and implementing our interventions in local communities,

we are sensitive to their social, cultural, environmental and economic conditions.

The project aims at enhancing livelihood options for the rural poor by

harnessing underutilised land and water resources. This project was

started in 2005 with the objective of enabling environment protection,

improving water and soil resources, maintaining ecological balance

and improving the livelihood of local communities. The project covers

38 neighbouring villages in Tijara Tehsil of Alwar district of Rajasthan,

the community surrounding the manufacturing unit in Bhiwadi.

The project objective is to reach out to 6,500 families by 2015

and increase their income by INR 10,000 annually on sustainable

basis. Already in its seventh year of implementation, the project has

benefited over 5,100 families, with 1,414 beneficiaries added during

the reporting period.

We have partnered with reputed NGOs, PRADAN and SST, to

undertake the project implementation while SPACE has been engaged

for its continuous impact assessment.

“My fallow small land was useless, until

the Dihiwali and Kariwali paals were

constructed. Now I am the proud owner

of 2 bighas of fertile land, which is my

major source of income today.”

- Illias from Gualda Village


0.59 0.67 0.69 0.69 0.72 0.77

0.27

1.23

1.02

1.41 1.41 1.53

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

Water consumption at the plant

Ground water recharged through NRM project

1.63 2.55

3.65 4.06

4.43 4.46

4.47 4.47 4.47

0.45 0.97

1.98

4.46

5.64 6.7

7.68

8.56

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

Cost Benefit

Project Activities:

The region around our manufacturing unit at Bhiwadi is water scarce.

Being a responsible Company, proactive need assessment led to the

launch of the NRM project, which includes:

• Community awareness and mobilisation through the formation of

Self Help Groups (SHGs)

• Construction of rainwater harvesting structures like earthen check

dams to harvest rain water from barren hills

• Terracing and land leveling in the catchment area of the earthen

check dams to convert these wastelands into farmlands.

• Large scale plantation and promotion of agriculture-based

livelihood activities on these leveled lands

• Capacity building of farmers and facilitation for market and bank

linkages

During the reporting period, a total of 33 Earthen Check Dams (Paals)

were constructed for rainwater harvesting covering 1,185 Ha of

catchment area. Additionally, 463 Ha of waste land was leveled and put

under agricultural use. We also facilitated plantation of 0.75 lakh fruit

and fodder trees, with 70-80% survival rate. This has benefited 1,414

new families in 38 project villages.

Activity Progress 2011-12

Progress 2012-13

Cumulative since 2006

Construction of earthen check dams (Paals) 25 08 182

Catchment area covered (Ha) 573 612 9,568

Ground water recharged (Mm3) 1.41 1.53 6.87

Land leveling (Ha) 205 258 1151

Plantation of fruit and fodder trees (No) 38,700 38,326 249,791

Number of Self Help Groups (SHGs) 25 24 132

Families impacted (direct/indirect) 471 943 5,155

The Project Impact so far

• Reversed the trend of ground water

depletion and rise in ground water level by

up to 2.1 meters in the project villages

• 1,151 ha of gullied waste/undulated land

converted into farmland

• 150% increase in crop yield with improved

agriculture practices and 300% increase in

the family income after Land Leveling

• Large scale plantation that led to increase in the forest cover and

income options for the poor

• 5,155 families benefited with sustainable livelihood interventions

• Contributed to National Food Security through increased agriculture

production and conversion of waste land to farm land

• The Business has been water positive since 2008-09 by creating

over 2 times more rain water harvesting potential against its net

water consumption at the factory

Water Consumption Vs. Water Replenishment (MnM3)

Crop Yield after Land Levelling (qt/ha)

Cost-benefitAnalysisofCheckDams Construction (Million Rs.)

Increase in Water Table after Construction of Check Dams in One of the Project Villages

(Metres)

Measuring the Impact of NRM Project Interventions

20.72 20.63 20.59

20.97 20.89

21.32

21.89

19.12

18.62

19.02 19.19

19.53

20.16

19.22 19.04 19.12

19.24 19.29 19.42 19.37

18.31

18.62 18.89

18.63 18.65

18.18

18.56

18.88 18.93 18.71

18

18.5

19

19.5

20

20.5

21

21.5

22

30.0

6.08

31.0

8.08

15.1

1.08

15.0

2.09

15.0

4.09

15.0

5.09

30.0

6.09

31.0

8.09

30.1

1.09

28.0

2.10

15.0

4.10

15.0

5.10

30.0

6.10

30.0

8.10

15.1

1.10

15.0

2.11

15.0

4.11

15.0

5.11

30.0

6.11

31.0

8.11

30.1

1.11

28.0

2.12

15.0

4.12

15.0

5.12

30.0

6.12

31.0

8.12

30.1

1.12

28.0

2.13

15.0

4.13

15.0

5.13

MONSOON 2008

RABI 2008-09

SUMMER 2009

MONSOON 2009

RABI 2009-10

SUMMER 2010

MONSOON 2010

RABI 2010-11

SUMMER 2011

MONSOON 2011

RABI 2011-12

SUMMER 2012

MONSOON 2012

RABI 2012-13

SUMMER 2013

Wat

er T

able

- M

tr

23.5 20.5

29 33

42 42 43

11.75 8.5 13

16.5 17

16 17

22 18.25

24

33.5

40 42

45

2006 2007 2008 2009 2010 2011 2012

Wheat Mustard Barley

Strengthening Rural Primary Education through ‘Project Shiksha’Our primary education initiative ‘Project Shiksha’ aims at improving the quality of education in rural schools and raising

minimum learning levels with special focus on girl child and marginalised sections of society. The Project was initiated in

2005-06 with our NGO partner SARD and the Department of Primary Education, Alwar under Public-Private Partnership

(PPP) model, to reduce school drop-out rates and mainstream out-of-school children in the neighbouring villages

surrounding the factory establishment.

During the reporting period, we continued our

efforts under the project which benefited 2,632

students in 12 government primary schools. The

interventions have led to an increase in average

school attendance, especially of girls, drastic

reduction in dropout rate from 53 percent to

just 6 percent now. Activities that led to such

developments include:

• School infrastructure development

• Remedial classes for the academically weaker children

• Providing support staff to the school

• Provision of computer-aided learning facilities

• Capacity building of school teachers and community

mobilisation


School Infrastructure Development and Access to Education

As part of our Primary Education Program, we have planned and

executed several infrastructure development activities like construction of

classrooms, toilets, kitchen, drinking water facility, development of play

ground, play areas and beautification of the school building by giving

them a BALA (Building As Learning Aid) makeover. The community

has shown great interest in promoting school development which is

evident from increased participation and financial contribution from the

communities as well. The improved schools have become a model in the

area. This initiative has positively impacted the community with improved

number of enrolments and attendance percentage in the schools.

In 2012, we launched a school van from Ban Ban village to Jhiwana

High School. This benefited 30 girl students, subsequently leading to

increased girl student retention in high schools.

Establishment of IBM Kidsmart Centres

During the reporting period, we entered into a tripartite MoU with the

Department of Elementary Education, Government of Rajasthan and

Increased enrolment in school by 12% over baseline ‘2007’1Increase school attendance from 67% to 86%2

Reduction in the drop out rates of school children from 53% to 6%3Increase in performance of academically weak children and their retention rates in schools4

Increase in involvement of parents in education of their children, especially girl child education5

Improvement in the overall school infrastructure6

IBM for the establishment of 12 IBM Kidsmart

Early Learning Centres in Government primary

schools at Bhiwadi. The objective of the program

is providing good quality teaching-learning

opportunities to the children from low socio-

economic status communities by reinventing the

educational methodologies through the use of

technology and child-centric approach.

Presently, the programme is being

implemented in 12 government primary

schools near our Bhiwadi unit covering over

1,400 children from 1st to 3rd standard. During

2012-13, the focus of the programme was on

infrastructure development in all the selected

schools. Under this process, a grant of INR

19.13 Lakh was sanctioned by the Rajasthan

government towards the required infrastructure

development for establishment of these

centres.

Capacity Building and Community Mobilisation

During the reporting period, several steps

were taken to improve teaching pedagogy,

such as development of innovative Teaching-

Learning Materials (TLM) and training on

its usage and class room processes. RTE

awareness campaigns were launched to

sensitise the community and school officials

on the provisions of RTE. Capacity Building

workshops were organised for the Government

school teachers on RTE, Life Skills & Positive

Discipline. A special school enrolment drive

was also organised in the neighbouring

villages leading to a 15% rise in enrolment in

comparison to 2010-11.

Rajasthan State Bhamashah Award to SRF-CB

Recognising our CSR endeavour for strengthening of primary education

in the rural schools near our Bhiwadi site, the Govt. of Rajasthan

felicitated SRF-CB with the State Level ‘Bhama Shah Award 2013’.

The award was presented to SRF jointly by the Minister for Education

and Minister for Panchayati Raj, Government of Rajasthan, at a specially

organised function at Jaipur in the presence of Chief Secretary-

Education and other eminent personalities.

Community HealthWe strongly believe that empowering the community is of utmost importance to community development and progress.

Thus, through our focused community health interventions and participatory approach we strive to empower community

members. Our health initiatives aim to bring a positive behavioural change in our workforce and the neighbouring community

through awareness, sensitisation and facilitation for service delivery.

Workplace Intervention on HIV/AIDS

Taking the proactive approach to prevent

HIV/AIDS amongst the workforce and the

surrounding communities, we initiated

awareness and prevention of HIV/AIDS in

2005-06. This is a corporate-wide programme

at SRF Limited, entailing the adoption of a

workplace policy on HIV/AIDS with support

from International Labour Organization (ILO).

Under this intervention, awareness and training

programmes are organised for employees,

contract workers, truckers and neighbouring

community on regular basis. As an impact of

the interventions:

• Over 4,000 people attended the

awareness & training programme during

the reporting period

• Approximately 50% employees

underwent voluntary HIV testing

organised by RSACS. No HIV positive

cases have been reported so far


Community Health Programme

The community health initiatives include periodic eye camps, disability camps for children, school health check-up camps

and awareness sensitisation on health and hygiene practices. These interventions are undertaken in partnership with AIIMS,

New Delhi, local Government PHCs and CHCs and the NGOs. As an impact of the intervention:

• A total of 3,583 people in 2011-12 and 1,568 people in 2012-13 benefited from these community health initiatives

• More than 650 community people benefited through community eye check-up camps in 2011-12

• 38 free-of-cost cataract surgeries were performed for the neighbouring community at AIIMS, New Delhi

• 166 identified children benefited from the ENT camp organised for the primary school children

• In 2012-13, 30 toilets and bathrooms were constructed on 50% cost sharing basis, improving the health and hygiene

condition in the project villages

• Capacity building workshops were organised for health service providers to improve the field-level service delivery. These

were attended by 36 ANM, ASHA and Anganwadi workers.

Empowering Women

Promoting the Women Self Help Groups

We have historically been contributing towards promoting social and

economic empowerment of women, especially from marginalised

communities, through formation and capacity building of women’s Self

Help Groups (SHGs). As on March 2013, over 132 women’s Self Help

Groups (SHGs) with bank linkages were functional. Subsequently, they

have started the practice of maintaining piggy banks by contributing

meager savings and lending internally between group members. This

successfully fulfills their micro credit needs.

Vocational Training

With the objective to promote employability through women

empowerment, we initiated a vocational training programme by

launching a tailoring course for adolescent girls. The course is run for 6

months with maximum enrolment of 30 girls with focus on Scheduled

Castes and the Meo-Muslim community. During the reporting period,

71 girls successfully completed the training. So far 252 girls have

been trained in 8 batches out of which 39 have got employment in

the neighbouring garment industries, while others are gainfully self-

employed. The focus of these trainings is also to provide functional

literacy to illiterate women.


Our manufacturing facility in Bhiwadi is located in a water-scarce region and we take proactive measures to ensure optimum

resource usage. Better resource management leads us to improve efficiency and reduce wastage.

SummaryofProgressin2011-13

Responsible Resource Management

3 Twenty years down the line, India will have far more people living in urban areas, whose lives will depend on

chemicals in one form or the other. Cities are bulging in size, and the competition for natural resources is inevitably

going to increase. As a company that addresses the growing needs of the people by responsible chemistry use,

resource use management is a key lever to growth. Our excessive dependency on and inability to optimally use

the resources will hinder business growth and leave the Business far short of societal expectations. Resource use

efficiency and management are therefore key focus areas where we address various issues regarding raw material

consumption, water conservation, waste management and bio-diversity.

Improving Resource Use EfficiencyAs material efficiency is an important performance indicator across production operations, we take several measures to use

our resources responsibly.

The focus of our operations is presently on reducing

specific consumption of virgin materials through

enhanced material efficiency, combined with recycling

and reuse of waste. Major technological interventions and

process changes to this effect include:

• Recycling of ETP sludge as raw material: Our

manufacturing unit generates acidic effluents which

are neutralised with the help of hydrated lime. The

neutralisation results in generation of fluorspar, which is

one of our critical raw materials. The ETP sludge is thus

completely recycled to generate anhydrous hydrofluoric

acid in HF plant and used as recycled raw material.

Operating in the water-scarce area of Bhiwadi in Rajasthan, we face

a multitude of risks regarding water availability, disputes in local

communities resulting from adverse impacts of water scarcity and access.

As a result we have identified two focus areas for water management:

• Increasing water efficiency of operations

• Increasing focus on NRM activities

pertaining to water replenishment

Significant materials

consumed (MT)

2011-12 2012-13

Fluorspar 22,800 21,881

Liquid chlorine 41,889 43,682

Methanol 12,321 13,686

Sulphuric acid 26,381 25,760

Oleum 6,572 7,090

Packaging material 1,198 994

2010-11 2011-12 2012-13

16.61

10.85 13.61

Reduction in Waste Generation* (MT)

(10% reduction target)(10% reduction target)

14.9513.50

2010-11 2011-12 2012-13

3.90

3.32

3.64

Reduction in Water Consumption (m3/MT)

(2% reduction target)

(2% reduction target)

3.82

3.74

* The target for waste generation is limited only to hazardous waste (encompassing spent oil, empty barrels and used batteries)** Due to poor market demand, plant run at reduced load

**

**


Progress Towards Water Positivity• All input-output norms are monitored on daily basis to eliminate chances of waste. Any deviation is corrected

immediately and reprocessing is kept to a minimal level. Recycling and reuse are extensively used to attain new

benchmarks in specific consumption of raw material.

The table below demonstrates the result of resource use efficiency initiatives undertaken during the reporting period.

Raw material usedSpecific consumption

Monitoring method2010-11 (Baseline) 2011-12 2012-13

ChloroformtoR22(ton/ton) 100x 99.0x 99.0x • Resource use efficiencies are monitored on daily basis using DCS data

• Causes for variation, if any, are analysed and improvement programmes are undertaken

Chlorine to CMS (ton/ton) 100y 99.8y 96.0y

Methanol to CMS (ton/ton) 100z 99.3z 99.3z

TCACtoP2 (ton/ton)

100x- 99.0x- 99.0x-

Effective Waste Management

In line with our commitment for effective waste

management, we disposed 10,861 tons and

13,613 tons of hazardous waste in 2011-12

and 2012-13 respectively. We successfully

reduced waste generation in the reporting

period. This was the result of a combined effort

of all employees, which helped us achieve

significant reduction in all categories of waste generation – cut drum,

fly ash or biomedical waste. We ensure safe and environment-friendly

transportation and disposal of waste and have entered into a partnership

with a local cement producer, where we divert our process waste fly ash

from the captive power plant and 80% of gypsum from the production

process. The remaining 20% gypsum is sent to brick manufacturers.

Waste minimisation and management is a behavioural trait amongst employees. We lay equal emphasis on minimisation

of non-hazardous waste, specifically the food waste generated out of canteens. The quantity of daily food waste is shared

with employees along with the data of how many stomachs can be fed by this waste quantity. This has made them more

responsible and we achieved a drastic reduction in canteen waste.

During the reporting period, constant efforts were made to

monitor our water use and impact on ground water table.

We believe that these parameters are critical, given the

nature of our operations and location of our manufacturing

facility. In order to ensure sustained availability of water

for future use, we have adopted several water resource

conservation and preservation strategies.

Water is a key focus area of the Integrated Natural Resource

Management Programme which is aimed at resolving

the water crisis issue in the neighborhood. We strive to

achieve higher ground water tables and better livelihoods

through facilitating farming and tree cultivation activities

for communities. These efforts have received recognition,

support and appreciation by local authorities and

communities through various forums. In 2007 we installed

five piezometers to measure the change in ground water

table. Constant monitoring has indicated that ground water

level has risen significantly in the region, where interventions

were undertaken.

These initiatives have kept uswaterpositivesince2008-09.

The total water replenished is higher than our ground water

withdrawal. During the current reporting period, we have

maintained this progress and continued to be water positive.

Protecting Biodiversity

In the current environmental scenario, biodiversity is a very important

indicator of ecological health. We seek to effectively manage the impact

of our activities on wildlife, as well as on the species it houses. SRF owns

34 hectares of land at the factory site. Approximately 36% of this land

is used for development of a green belt – more than the compliance

with statutory norms. Expansion of this green belt serves as an effective

pollution mitigation technique as well as bio-indicator for the pollutants

from the manufacturing unit.

We are well versed with the risks associated with loss of bio-diversity and

ensure that no such risks arise from our manufacturing activities. There is

no National Park, Wild life sanctuary, Biosphere reserve, Wildlife corridor,

Tiger/Elephant Reserve or Migratory route within a radius of 10km from

our factory. However, the following Protected/Reserved Forests exist

within this vicinity:

2010-11 2011-12 2012-13

9.350

4.790

3.260

2010-11 2011-12 2012-13

0.013

0.018

0.010

2010-11 2011-12 2012-13

112.990 109.690

95.240

2010-11 2011-12 2012-13

16.880

13.640

9.880

Cut Drum (MT/MT of production)

Biomedical Waste (kg/annum/employee)

Fly Ash (kg/MT of production)

Canteen Waste (kg/annum/employee)

0.69

0.69 0.72 0.77

1.02

1.41 1.41 1.53

2009-10 2010-11 2011-12 2012-13

Water consumed (Mnm3) Water Replenished (Mnm3)

Water Consumed v/s Replenished (MnM3)

• Indaur 6km away

• Banban 0.32 km away

• Chaupanki 4.50 km away

• Gwalda 5.20 km away

• Khorikalan 2.00 km away

• Sarekalan 5.50 km away

• Ghatal 6.50 km away

• Khidarpur 4.00 km away

• Godhan 3.00 km away

• Chuharpur 10 km away

• Mayapur 3km away

We have carried out a detailed

environmental impact study in order

to measure and avoid the impact

of our process and operation on

the protected areas and reserved

forests. The study findings illustrated

no negative impact on the native

flora and fauna.


As stated in our previous Sustainability Report, we have achieved significant progress in developing our business portfolio

and scale of operations. We generated profits even during turbulent times, thereby demonstrating our strong industry

leadership, uncompromising service and product quality and long-term relationship with clients.

Description Achievement in 2011-12

Achievement in 2012-13

Production of refrigerants (ton) 15,058 13,974

Production of chloromethanes (ton) 37,972 41,169

Productionoffluorospecialtyproducts(ton) 1,628 1,888

Product-wise sales (INR million)

HCFC22+HFC134a 4,158 3,007

Chloromethanes 733 591

Fluorospecialities chemicals 1,406 1,669

By product sales Amount (Ton)

Revenue (INR million)

Amount (Ton)

Revenue (INR million)

Gypsum 37,440 33 36,443 32

Hydrochloric acid 72,791 80 69,633 58

Sustainable Economic Growth

4 The global economy is facing challenging times. This has impacted industrial performance, growth, bilateral

relations and international trade. For sustainable growth there is a need to overcome this crisis. Our short- and

long-term strategies aimed at offering sustainable products, ensuring inclusive human capital growth and

infrastructural development, are testimony to our commitment to sustainable economic growth.

Our strategic focus on achieving operational

pinnacles surfaces from our investments

in R&D. We also made significant internal

changes in the governance structure, leading to

separating the Fluoro Chemicals and Specialty

Chemicals Businesses to be led by individual

CEOs. This has fuelled the pace of innovation,

with the teams achieving remarkable milestones

during the reporting period.

During 2011-12, the pilot plant at Bhiwadi was

used to generate data to scale up laboratory

process to the commercial level of 9 different

products. The pilot plant is also producing

quantities for trial batches at our customers’ end. Based on processes

developed in-house, three commercial plants have been set up and

are operational at our new site at Dahej in Gujarat. We take pride in the

fact that all our new plants in Dahej are being designed and executed

with in-house technologies, a huge testimony to the R&D and project

implementation capability developed over the years.

In the coming years, we expect to derive value from the new chlorinated

solvents being manufactured at our facility in Dahej. In addition, a new

HFC 134a/125 plant in Dahej is expected to be commissioned by

2013-14. The upcoming plant is backward integrated with a global-

size HF plant to meet the production need. In Specialty Chemicals, the

business is expected to expand horizons and the range of specialty

products coming out of Dahej.


Summary of Progress in 2011-13

TargetProduction Capacity*

Progress

Increasing the Choloromethanes plant capacity

50,000 TPA The capacity expansion, being a capital intensive process, was initiated in 2009-10. Accordingly, we have obtained statutory clearances (like Environmental Clearance). However, the actual expansion of production capacity is a function of various internal and external factors. Considering the volatile market conditions, the capacity enhancement projects have been suspended temporarily.

Increasing the HFC 134a plant capacity

12,000 TPA Our manufacturing unit at Bhiwadi has reached the maximum limit for further expansion, considering the limited availability of land and other resources. Therefore, our new manufacturing unit at Dahej was commissioned in 2012-13, where additional capacities for both HFC 134a and Fluoro Chemical products are in various stages of operation. Since the Dahej unit is not under the current report’s boundary, details of production capacities at the new location are not being reported currently.

Increasing the fluorospecialtiesplant capacity

3,000 TPA

*AspertheapprovedEnvironmentalClearanceobtainedbySRF-Bhiwadi

During the reporting period, we had achieved significant operational efficiency by de-bottlenecking our P3 plant. The P3 plant

was commissioned in 2004 with capacity of 4.2 MT/month, subsequently increased to 6 MT/month. From the business and

economic growth perspective, there was significant unmet demand for increasing production. The only solution in this situation

was to obtain higher throughputs through the existing production infrastructure, and resort to de-bottlenecking of the plant.

In order to meet market demand of about 8 MT/month consistently, we carried out a comprehensive de-bottleneck study

and accordingly taken multiple initiatives including replacement of equipment, process changes, time mapping and time

cycle study. With successful implementation of these initiatives, we have improved the yield and batch cycle timing and now

produce over 8 MT/month.

Development of New Refrigerant Grades

The idea to develop new grades of refrigerants occurred to us when an old and key client persistently requested us to supply

PTFE grade HCFC 22. Our internal teams evaluated the request, assessed its feasibility, made the required design changes

and executed the project. Although this was on a pilot scale, we realised that there is significant demand for PTFE grade

HCFC 22, and our existing customers would prefer this product from us. It was our customers’ long-standing trust on our

product quality that compelled us to introduce a different grade of refrigerant.

We undertook a detailed scale-up feasibility study and identified the challenges in undertaking this project at a larger

scale. Three out of eleven quality parameters set out by the client were not being met due to impurities in the product co-

generated in the process itself. We evaluated a number of options to address this issue, ruling out technically infeasible

and cost-intensive solutions to come up with process optimisation solutions. Eight different scenarios were simulated

by varying parameter concentrations and process changes. As a result, we have successfully implemented a detailed

solution for developing high quality PTFE-grade HCFC 22, which is being supplied to other interested customers as

well. We attribute the success of this experiment to long-standing relationships with customers, and the efficiency of the

process teams that designed an effective solution. The learning of TQM implementation was effectively put to use where

every employee worked towards delivering quality output to clients.

Developing New Refrigerant Blends (as QCDSM improvement initiative)

In line with our commitment to phase out HCFC 22 by 2030 for refrigerant purpose, we have stepped up to find feedstock

applications of our HCFC 22 as well as suggest suitable refrigerant substitute to our customers using HCFC 22.

Accordingly, HCFC 22 product quality has been improved to make it suitable for PTFE production on one hand and on

the other hand, in-house technology-based TFE manufacturing plant has been established at our Dahej site to consume

HCFC 22 as feedstock.

Through an intense technical study, it was proposed that HCFC using machines could be successfully retro-fitted with three

blends – R 410a, R 404a and R 407c.

Accordingly, business has developed the capability to supply the full range of these blends. In the reporting period, we

introduced R 410a, R 404a and R 407c in the Indian market.

This has helped us strengthen our relationship with existing customers, opened up new markets for our business, and

contributed to the economic growth of our suppliers.

Public PolicyThe company participates in public policy advocacy through memberships at industry associations, including FICCI, CII and

ASSOCHAM. Additionally, key employees hold responsible positions in the special committees of these associations. For

instance, H S Dua is a member of the sub-committee on CSR at CII, as a certified assessor for CII-ITC Sustainability Awards.

Improving Operational EfficiencyImproving operational efficiency is an integral element of our contribution

to sustainable economic growth. New product development, de-

bottlenecking, new grade development and QCDSM modifications are

the four cornerstones of our strategy. We have discussed our research

and development initiatives, and updates on new product development in

the ‘Responsible Product Development’ section.

During the reporting period, SRF and the Indian Istitute of Chemical Technology (IICT), Hyderabad, together organised the

first India International Symposium on Fluorine Chemistry (IISFC) from 20th to 24th Feb, 2012.

The first-of-its-kind symposium saw a congregation of more than 150 delegates and speakers from 13 countries including

USA, UK, Germany, Canada, Russia, Japan, S. Africa, Singapore, France, Italy, Hungary, etc.

The inaugural address was given by Ashish Bharat Ram, MD, SRF Limited, where he said, “It is necessary for our future

well-being on this planet that we protect our environment, particularly the Ozone layer, and that we conserve our energy

and resources. The importance of Fluorine is not limited to refrigerants anymore; it is now being well accepted in the field

of pharmaceuticals and agrochemicals. Over the last decade or so, a lot of work has been going on in this area and it is

clear that the technical capability that exists in India will continue to grow for many years to come.”

De-bottlenecking

Debottlenecking is the process of increasing

throughput by identifying and eliminating the

limitations in individual equipment. This involves

process simulation studies and trial runs to

identify and overcome bottlenecks.


Our employees play a key role in translating strategic plans into reality. We assign high value to our human capital and

constantly endeavour to deploy employee engagement initiatives, invest in their learning and development. While the policies

and processes related to senior management are handled at the SRF Group level, the well-being of middle management to

contractual labour is administered by the Chemicals Business HR department. Therefore, specific policies pertaining to our

nature of business are launched and regularly reviewed, leading to improved employee satisfaction quotients.

Parameters 2011-12 2012-13

Employees <30 yrs 30-50 yrs >50 yrs Total <30 yrs 30-50

yrs >50 yrs Total

Senior management 0 12 5 17 0 11 5 16

Middle management 1 18 3 22 1 17 5 23

Junior management 19 45 6 70 19 46 7 72

Non-management workers 183 278 30 491 159 292 29 480

Contract workforce 372 311

Contractual labor 197 186

Total employees 1,169 1,088

New joinee employees <30 yrs 30-50 yrs >50 yrs Total <30 yrs 30-50

yrs >50 yrs Total

Senior management 0 0 0 0 0 0 0 0

Middle management 0 1 0 1 0 0 0 0

Junior management 7 3 0 10 7 3 0 10

Non-management workers 31 19 0 50 36 13 0 49

Total new joinee employees 61 59

Employee Engagement and Development

5 Four out of the fourteen principles of Quality professed by Prof. W. Edwards Deming emphasise employee

participation in Total Quality Management. At SRF, we view employees not only as an integral element of our

quality management process, but as a critical lever for achieving accelerated business growth.

During the reporting period, our human resource function

has contributed in a significant manner and proved to

be a true strategic partner to the organisation. Some

important initiatives during this period include revamping

of the Performance Management System, overhauling of

the People Development System called the Development

Dialogue, and creating a mechanism for provision of better

growth opportunity to employees. Through these initiatives,

we have been successful in minimising our attrition ratios.

We believe in diversity and strictly enforce policies

and procedures against racial, religious and gender

discrimination.

A significant portion of the non-management staff has

attended rigorous SA8000:2008 training, covering the

basics of human rights, discrimination and harassment.

9.52

12.27 11.17

11

FY 2009-10 FY 2010-11 FY 2011-12 FY 2012-13

Employee Turnover (% of total workforce)


Also, there were no instances of child labor, forced labor, discrimination, sexual harassment or any other violations of human

rights during the reporting period. There were no incidents of industrial unrest either. Furthermore, the reporting period was

identified as a period of change. Some of these include introduction of horizontal and vertical promotions, improvements in

new hire attraction and retention processes, and launch of IT-enabled HRIMS for non-management workers and design of

values consequence management systems.


Target Yearly target Progress 2011-12

Progress 2012-13

Employee turnover (%) <10.00% 11.17% 11.00%

Unplanned absence (% of available man-hours of work) <1.00% 1.1% 0.9%

Training manhours per employee per annum 40.00 37.07 35.27

Skill enhancement of junior management –transition from ‘beginner’ level to ‘skilled’ level (%)

10.00% 10.68% 13.17%

Employee satisfaction (%) 75.00% 71.00% 72.00%

Overall happy employee (%) 95% 98.00% 98.00%

Needs Assessment and Development Plans

Every year, we conduct employee needs assessment and prepare development plans that largely align to our business

objectives, employee skill set, personal developmental goals, areas of interest and needs. During the reporting period, it was

observed that employees at different departments across hierarchy levels have unique development needs, as illustrated below.

The policy improvements, trainings imparted and reward programmes are customised to these needs, and reflect these trends.

SegmentAwareness on human

rights

Technical Training

Training on soft skills

Health & safety trainings

Grievance redressal

Special policies Rewards

Sr. mgmt 4 4 4 4 4

Mid & Jr. mgmt 4 4 4 4 4 4 4

Scientists 4 4 4 4 4 4 4

Field staff 4 4 4 4 4 4

Workmen 4 4 4 4 4 4

Contract labour 4 4 4 4

The management does not recognise any formal collective bargaining agreements in the manufacturing facility, which is a

re-statement from our previous Sustainability Report. However, we ensure that we do not restrict the freedom of collective

bargaining. For this, we have set up employee engagement mechanisms through which employee/contractor feedback is

sought on a periodic basis. Some of our important policies and employee engagement mechanisms include:

It can be observed that a large portion of needs are

concentrated towards middle and junior management,

scientists, field staff and workmen. These needs are

thoroughly addressed by the SRF-CB HR team’s

initiatives. The policies, procedures and trainings for senior

management are supervised by the SRF Group’s HR team

and implemented as a group-wide practice. The needs of

contract labour are addressed through coordination with

the Contractor, with whom we enter into an agreement. At

the time of engaging the contractor, we inform them about

the Company’s procedures, stance on anti-discrimination

and human rights violations.

“I participate in the Red book meetings

daily. Voicing my concerns as and

when they arise helps me focus my

attention on work.”

- Kunwar Pal, Jr. Engineer, EHS

• People Red Book manual for Grievance Redressal: There is an

effective grievance redressal mechanism in place implemented

through a ‘People Red Book Register’ which captures, addresses

and resolves all employee-related complaints and needs. The register

consists of a people Red Book manual which lists out the complaint

handling process. The process involves collecting complaints,

classifying them into complaint or need, assessing its validity and

impact followed by its resolution, closure and status update in the

Red Book register. Modes of seeking feedback encompass:

º Departmental meetings

º E-communication

º Personal interaction with employees

º Complaint registers and TIE (Total Involvement of Employees)

Group meetings

• Self education subsidy: The Business seeks to nurture high

quality man-power through provision of self education subsidies

to its employees.

• Other benefits include house related

allowance benefits, frequent health

checkups, scholarships and discount on

fee for children of employees, canteen

and transport subsidies. In terms of loan

subsidies, the Company provides company

loans, consumer durable loans and housing

loan subsidies to its employees.

• Commitments under SA8000:2008: SRF-CB has received the SA8000 certification and all its management systems

are in line with SA8000 mandate enabling it to screen its contracts on various human rights aspects, child and forced

labor, freedom of association, discrimination, disciplinary practices, working hours and remunerations. All its operations

are subject to human rights reviews in line with SA8000 procedures.

• Policy against Sexual Harassment has been put in place to ensure all employees work in an environment free from all

forms of sexual harassment.

• Work’s Committee has been instituted under the provisions of Industrial Disputes Act, 1947 to resolve disputes with

factory workers.


Skill Enhancement through Training

Our skill enhancement approach involves a combination of developmental assignments, cross-functional teams, class room

training, coaching on-the-job modules through skill matrix and participation in external programmes to enable employees to

continuously learn and develop their capabilities.

Type of Training Program Theme/Topics (Illustrative)

ERP/IT Skills Basics of Computer operations, software tools like EAM, MS office and Oracle Apps

EHSDetailed information on the latest industry trends in process safety, General Safety Awareness and Emergency Response Training (ERT)

TQM Basics of TQM, PSP Training, TIE Training, SA8000 and HIV awareness programs

Technical Basics of chemical engineering, PLC, Gas chromatography, seal and pump maintenance

Marketing & sales Presentation Skills, Business Writing and Negotiation Skills and Accounts management

Commercial Information on Service Tax, VAT and TDS

Soft skills Personality Development and Communication Skills

Capability Building through Use of Models – Learning Center

Our operations involve closed-loop processes and closed equipment. In

order to appraise our engineers and operators on further information and

provide them with hands-on experience, we have prepared models of

our manufacturing units, in-house. Beginning on a small-scale in 2008,

we now have 16 models of various processes in a full-fledged Learning

Center, which has become the center for all trainings. This Learning

Center has been very successful in imparting skill-based training. This is

undertaken with the help of visual methods (transparent models showing

internal functioning of plant equipment), models made by employees of

respective departments by usage of scrap material. Training is imparted

using these models and enhancement in skill is monitored by the skill

matrix system. This type of learning center is unique to our plant. New

employees seldom get an opportunity to see plant equipment from inside

or understand their functioning in detail. This is made possible through

these educative and effective trainings which help them take charge of

their function quickly.

TIE Groups (Total Involvement of Employees)

Due to hazardous nature of the plant, all process modifications require

technical validation. No individual can make a process change by

themselves. Our TIE groups are cross-functional teams (unlike Quality

Circles) covering 100% employees. These teams identify equipment

problems and address them. Each group is facilitated by an officer. TIE

is a part of our daily management at the shop floor. The group meets

daily for 20 minutes for 5S and autonomous maintenance during normal

working hours at the start of the day. This enables rapid implementation

The training needs of security personnel are fulfilled by the

security agency, with which SRF signs a contract for security

services. The agency provided 846 hours in 2011-12 and

945 hours of training in 2012-13 to security personnel

deployed at our manufacturing facility in Bhiwadi. We ensure

that the security supervisor receives formal training from

SRF on human rights concerns, mechanisms to deal with

violations and reporting procedures. This supervisor in turn

provides inputs to the security personnel on these aspects.

During the reporting period, we had taken a target of

ensuring 40 man-hours of training for every employee.

Through diligent efforts and timely record-keeping, we

could provide an average of 35.27 hours of training

per employee in 2012-13. However, this man-hour

estimation includes only formal, documented classroom

trainings where attendance is recorded by a department

representative or HR person. During the reporting period,

we had conducted extensive developmental activities like

guest lectures, tool box talk, flash discussion sessions, ad-

hoc training sessions regarding TQM implementation. Two

major learning initiatives include activities of the Learning

Center and TIE group interactions.

of good ideas. Periodic audits are conducted

and best performing groups are recognised.

TIE groups promote culture of identifying and

implementing the improvement ideas at the

lowest level.

Reward and RecognitionAccording to the Company policy, all

confirmed employees are covered under the

performance appraisal system. This policy is

diligently implemented in the Company, and

every employee undergoes the full cycle of

performance appraisal, beginning with goal

setting, review, mid-term review and year-end

review. During the reporting period, the HR

department also executed several initiatives in

the form of employee rewards to promote overall

employee satisfaction. These activities include:

• Celebration of festivals, employee

birthdays and important events

• ‘Protsahan’, a system to recognise and

acknowledge employee contributions and

good behavior

• Extended employee benefits –

Performance awards, spot recognition,

team and individual awards and long

service awards

• Employee recognition through

various modes and means – letters of

commendation, mementoes, publication

in internal magazines, award of

scholarships, or issuance of certificates

• Contract labour reward


Occupational health and safety is a top priority for us. Our operations

involve extensive handling, use and transportation of hazardous

chemicals, and therefore providing a safe work environment to

all employees is a real challenge. Being a REACH compliant and

Responsible Care certified company adds to our EHS responsibilities.

Addressing health and safety risks at the workplace reduces lost time,

reputational risks associated with accidents, and helps in creating a

culture of safety within the organisation.


6 Owing to the nature of our business, the Bhiwadi manufacturing

unit is classified as a Major Accident Hazard (MAH) Unit.

This classification is based on the quantity and hazard of

chemicals handled at the unit. With the economic growth, the

quantity has increased manifold, so has the associated hazard.

In order to minimise the hazard vulnerability and probability at

the unit, we have adopted a management goal to maintain an

Accident Frequency Rate that is more stringent than the widely

accepted Chemical Industry Global Benchmark. Our internal

goals are <0.50 injuries/million man hours worked for Safety, and

maintaining ‘Zero’ liquid effluent discharge.

We constantly integrate health and safety concerns into our business operations. Our thrust on embedding safety as

a culture is clearly evident from regular external benchmarking, audit feedback and review of our Occupational Health

and Safety (OHS) practices. Maintaining the robustness of existing management and reporting systems, enhancing the

awareness of our employees through continuous training and benchmarking safety performance with industry best practices

are major thrust areas for us. We classify injuries in line with standard practice into five categories, namely reportable fatal

accident, reportable non-fatal accident, poisoning or occupational disease, minor injuries and first aid case.


TargetTarget

(2011-12)Actual

(2011-12)Target

(2012-13)Actual

(2012-13)

First aid injuries 24 34 30* 29

Minor injuries 7 7 6* 3

Reportable fatal & non-fatal injury, poisoning or occupational disease

0 0 0* 0

EHS training to employees (training man-hours per employee)

12 8.25 12 10.25

EHS training to contract workers (training man-hours per contract worker)

10 7.68 10 10.62

* Targets are set at 10% reduction from previous year’s actuals


EHS ModelWe ensure that safety systems are well followed

at all sections of the unit, beginning with

transportation of raw materials to manufacturing

and dispatch of finished goods. Since our

chemical plant has inherent risks, the safety

system encompasses safety not only in design

but also safety in terms of adopting operational

measures that reduce risk. We reduce risk in all

our hazardous activities up to a moderate level

through various measures encompassing:

• Technological measures

• Operational measures

• Personnel capacity building; and

• Monitoring and measurement

EHS Governance Structure

During the reporting period, there were 9

active Environment, Health and Safety (EHS)

Committees. We have instituted an Apex EHS

Committee and Statutory Committee at plant

level, and seven Area EHS Committees at the

Department level to manage EHS issues across

the Company. These committees meet regularly

to work on agendas related to health and safety.

Indicative focus areas include accident evaluation,

health and safety inspection reports, causes and

preventative actions for unsafe situations.

Our EHS model ensures adequate

representation from all levels of employees

and provides a platform to actively participate

in EHS improvement programmes by raising

issues. Over time the EHS models have evolved

and now include several aspects like

• Specialty Chemicals plants added with

own design

EHS PerformanceOwing to the robustness of our EHS model and diligent

implementation, we have witnessed no lost days, fatality or

reportable injury during the reporting period. We have successfully

completed 6.9 million reportable accident free man-hours from

29th July 2010 to 31st March 2013. We are continuing our

performance in this aspect, and our target is to achieve 10 million

accident free man-hours. Our previous best performance was

5.71 million accident free man-hours (from 14th May 2002

to 15th Jan 2006).

We endeavour to continuously modify and update our health and

safety practices on the basis of our own experiences as well as our

learning from industry peers worldwide. Due to our diligent efforts

in improving the awareness levels of employees we have achieved

EHS TrainingsCarrying forward our commitment to the implementation of robust EHS systems, we conduct regular trainings for plant

personnel, encompassing class-room and practical trainings. Apart from standard EHS practices, we ensure that before

deployment of employees and contract workers on job, the following steps are undertaken:

Additionally, contract workers are graded as green, red and yellow,

signifying the hazardous nature of the process they will handle, wherein

green signifies non-hazardous processes, red means hazardous

processes and yellow is exclusively for workers working with the most

hazardous chemical, Chlorine. Based on this grading, each group is given

specialised training. This is to ensure that all contract workers deployed at

a particular process have acquired requisite EHS skills.

“I got the award for reporting highest

number of near-miss incidents. I’m glad

that the company appreciates my nature

of giving attention-to-detail which is

making our workplace friendly and safer.”

- Rai Singh, Jr Engineer, Utilities & Employee Representative

2008-09 2009-10 2010-11 2011-12 2012-13

0.85

0.43 0.34

0 0

Reportable Accidents - Frequency Rate (FR)

2009-10 2010-11 2011-12 2012-13

6

1.7 2.3

1.1

Minor Injuries - Frequency Rate (FR)

2009-10 2010-11 2011-12 2012-13

11.1

14.2

11.5 10.3

First Aid cases - Frequency Rate (FR)

Health Check-up Classroom training & test Practical training & test

Deployment at work

reportable accident-free man-hours of 2,946,566

and 2,814,168 in FY 2011-12 and FY 2012-13

respectively, with zero fatalities over the past 10

financial years.

Reportable Accident – Frequency Rate

Reduced reportable accident frequency rate to 0 in

2011-12, and maintained it there in 2012-13. This is

our best performance since the past 8 years.

• Emergency Response Team

• Cross functional system for authorisation of all process changes

(Engineering Work Request – EWR)

• Visual EHS gallery for contract worker training

• Certification of employees by British Safety council

Apex EHS

committee

Statutory EHS

committee

Area EHS committee

(7 committees)

Chairman - HODsMembers - Representatives from all depts.Meeting - Bi-Monthly

Chairman - Head of WorksMembers - HODs and Nominated EmployeesMeeting - Quarterly

Chairman - CEOMembers - Head of the department (HOD)Meeting - Six Monthly

EHS Governance Structure

EHS Model

Direct involvement till lowest level in EHS management and monitoring from the top


Health and Safety Best PracticesOur commitment to Health & Safety is also translated into action; We have an EHS Director whose sole responsibility is to

oversee health and safety performance of the Company. We have also incorporated an assessment of potential hazardous

operations and applicable safety standards in new process development:

Award for Near Miss

Reporting

• In order to bring EHS practices to the next level SRF

has introduced a ‘Near Miss Reporting System’

encouraging employees to report such cases in order

to ‘Nip the issues in the bud’.

• To promote this activity further SRF has come out

with two awards - one on ‘Highest number of Near

Miss reported by the individual’ and the second one

for the ‘Best Near Miss reported’

Employee engagement

on matters related to

Health & Safety

• As part of our regular Health and Safety promotional programme, the 42nd National Safety Week was

observed in March 2013

• Various safety contests and sessions were organised to increase awareness and instill its importance for

the company and the individual

• During the National Safety Week 430 employees in FY 2011-12 and 523 employees in FY 2012-13

participated in various safety contests

• The World Environment Day is celebrated annually, to spread awareness of the need to take positive

environmental actions

• We also celebrate other important EHS days like Fire Service Day and Ozone Day

Introductory course

from British Safety

Council

During 2012-13, 96 more employees were certified by the British Safety Council (BSC) in the area of Health

and Safety knowledge, post clearing the written examination: an internationally recognised credential. Till

date 279 employees have been certified by the BSC for level 1 safety knowledge. We are also planning the

next level certification for existing certified employees.

Incident investigation

analysis

The EHS department proactively undertakes internal benchmarking and extensive incident analysis to identify

patterns and key areas of concern. Material observations are taken up by the top management, subsequent

to which required changes are introduced into the EHS implementation system. In order to formalise these

activities, we are in the process of preparing an exhaustive procedure for carrying out in-depth root cause

analysis and design action plans for bringing down safety incidents to next minimal level.

Launch of 24 new SOPs

to strengthen EHS

systems

It is standard practice at our manufacturing unit at Bhiwadi to conduct proactive benchmarking activities

with global best practices. In one such internal process, it was identified that there were gaps in the

existing EHS practices. In order to immediately bridge this gap, 24 new EHS SOPs were launched, taking

guidance from various industry leaders.

Capacity enhancement

and Technology

upgradation of STP plant

The existing Sewage Treatment Plant was designed and installed as per the applicable rules at the time

of commissioning of the Bhiwadi manufacturing unit. It has the design capability to maintain less than 100

ppm of BOD ( Biological Oxygen Demand) in treated water. A recent revision in the Environment Protection

Act mandated that the applicable BOD limit be 30 ppm.

It was technically infeasible to bring down the BOD level of the existing STP plant from 100 to 30 ppm.

Therefore, the STP technology was upgraded to ensure regulatory compliance.

Deviation intimation slip

We follow a stringent ‘Safety Deviation’ procedure, wherein employees deviating from safety requirements

are dealt with severely. In order to avoid incidents and injuries, we ensure repetitive deviations are avoided.

Based on the severity of the deviation and the number of times repeated, employees are reprimanded with

warnings and penalties, to the extent of including this as criteria for performance evaluation.

Chemical Weapon

Convention,

International

On 10th Dec 2011, a half a day awareness programme on ‘Chemical Weapons Convention’ was conducted

at the Bhiwadi factory premises by the Indian Chemical Council (ICC) in association with Department of

Chemicals & Petrochemicals and Ministry of Chemicals & Fertilizers, Government of India.

Chemical Weapons Convention is a universal non-discriminatory, multilateral, Disarmament Treaty, which

bans the development, production, acquisition, transfer, use and stockpile of all chemical weapons.

Fluorine chemicals are also classified under the convention, albeit as low impact chemicals. A total of 40

participants from various chemicals companies attended the programme.

Responsible Care Management SystemWe have been recertified for Responsible Care by Indian Chemical

Council, which establishes organisational commitment for improving

health, safety and environmental performance. We are one of the only 17

Indian companies which have been allowed to use the Responsible Care

logo. We are proud to say that we have retained this honor since 2006,

and have obtained third recertification in January 2013, post the audit by

the ICC panel.

The Responsible Care management system is implemented around the

key pillars of the management system, encompassing:

• Process safety

• Employee health and safety

• Emergency response

• Pollution prevention

• Distribution

• Product stewardship

Moving up the Safety Ladder through External Audits

As a part of the benchmarking process, against leading international

safety standards, we regularly organise external safety audits to study

the impact and effectiveness of our efforts. During the reporting period,

we hosted stringent external safety audits as per IS:14489 standard. In

2011-12, the audit was conducted by Chillworth Global, a leading global

safety consultant and in 2012-13, it was conducted by Environment

Quality Management Services. As an outcome, 44 process improvements

have been made during the reporting period.

Most of our customers conduct frequent audits at the manufacturing unit,

in line with the supplier safety requirements of their companies. We have

always displayed highest levels of performance in these audits, and have

received awards for being the best supplier from Syngenta and Bayer

Crop Sciences.

Propagating Practical Knowledge on Occupational Health & Safety

Several employees have delivered key note addresses and chaired

awareness sessions on the topics of occupational health and safety. This

is on account of our exceptional performance in this area, which provides

numerous opportunities for replication at other companies/locations.

• Rajiv Marwah on ‘Responsible Care Implementation and

Monitoring’ at ICC in August 2011

• HS Dua on ‘Sustainability and CSR – Prospective and Best

practices’ at the ICC Seminar on CSR on 1st June 2012

• Himanshu Shukla on ‘Accident

Investigation Analysis and Report, A case

study’ at the National Safety Council,

Rajasthan Chapter, Jaipur on

11th August 2011

• Himanshu Shukla on ‘Fire detection and

control system – Selection, Inspection

and Maintenance’ at NSC programme in

October 2012

• Himanshu Shukla on ‘Sustainability &

Environment, Health and Safety – What is

the connection’ at a CII Session on Best

practices in EHS Management, Gurgaon

on 20th February 2013

• Himanshu Shukla on ‘International Day

for preservation of the Ozone Layer’ at

the Rajasthan Pollution Control Board,

Neemrana Manufacturing Association on

16th September 2011

21

36 38

2010-11 2011-12 2012-13

21

36 38

2010-11 2011-12 2012-13

Near Miss Reporting (Numbers)


We adopt an extensive multipronged procedure for responsible product development, by considering regulatory

requirements, global developments in chemistry, market movement, customer feedback, and comprehensive internal

research. Our business decisions are constantly reviewed to suit customer requirements, environmental concerns and

community well-being, which is reflected in our approach to product development, process design and management

system implementation.

New Product DevelopmentChanging regulatory scenarios, international collaborations and progressing knowledge is transforming the way

companies use chemistry. We are currently the domestic market leader for refrigerants in India. We further aim to achieve

market leadership in HFC blends and intend to start developing new generation low GWP refrigerant (HFO 1234yf) to

meet emerging requirements of car OEMs globally. We are in the process of planning the phase out of HCFC 22, in view

Responsible Product Development

7 International environmental agreements aimed at protecting the Ozone layer through phase-out of ozone

depleting substances have significant impacts on business sustainability. The Montreal Protocol,

signed in 1992 required us to gradually phase out the manufacturing and sale of major products.

Beginning with CFCs (R 11 & R 12), moving on to HCFC 22 and subsequently CTC, the Chemicals Business has

devised an exit strategy for these product offerings. In line with India’s commitment to Montreal Protocol,

we phased out the production of Halon in 2003, R 11 & R 12 in 2009 and CTC in 2010. Our responsible product

development initiatives thus began with exploring countermeasures to the threat of business closure and emerged

as an opportunity to launch innovative products and enter new markets.

of which we are launching many new products in India. In partnership

with the Indian Institute of Chemical Technology, Hyderabad, we have

developed process technology for HFC 134a. This commercial plant is

setup based on in-house technology, making us India’s first and only

company to manufacture and sell this ozone-friendly refrigerant gas in

the country.

We have significant investments in the R&D facility and are expanding

capabilities to synthesise new chemicals as per customer requirements.

We are also diversifying the product portfolio into non-fluorine

compounds and related products. For products and formulae that are

already under commercial production globally, we rely on internationally

published data on life cycle impacts.

Strengthening Customer Relationships Our significant customers include OEMs, dealers and multi-product

chemical companies. Our organisational emphasis on Total Quality

Management leads to proactive communication with customers

to build trust and achieve the highest levels of satisfaction. We

continuously seek formal and informal feedback, significant

comments derived out of which are documented and considered for

remedial actions.

For our Fluoro Chemicals Business, we conduct satisfaction surveys of

OEMs and distributors. The survey includes product quality, packaging,

logistics, service and competitiveness as elements, and is done on a


5-point scale. Survey results done during the reporting period indicate that customers are largely satisfied with the quality

of our products. For our Specialty Chemicals Business, customer satisfaction surveys were first launched in 2010-11,

using a 100-point scale. Since then we have been undertaking these surveys on an annual basis. Selected major customer

feedback and corrective actions are indicated below:

Customer feedback Corrective action

Fluoro Chemicals – 13 complaints in 2011-13

Quality of packaging may be improved

to reduce leakage of Floron cans

New packaging material, cap size, transportation methods were launched as

described below. The number of complaints has significantly reduced since this

initiative

Need for new-age refrigerants/absence

of 4th generation refrigerants

New product development team has already initiated work on 4th generation

refrigerants. New products will be launched as soon as significant break-

throughs are achieved

Product size and quantity; request for

launching 500gm cans for Floron

Achieved an optimum solution to ensure customer satisfaction and maintain

regulatory compliance and launched 450 gm cans in compliance with regulatory

requirements thereby adhering to requirements of both stakeholders

Improve the availability of products

during peak summer

Achieved increased production and throughput by debottlenecking significant

processes. Enhanced availability of products as per seasonal requirements

Specialty Chemicals – 1 complaint in 2011-13

Request for more technical information

from dealers on product range

Undertook training and capacity building programmes for dealers on the end

use of specialty products, which are technical in nature

Launch of New Packaging for Floron Cans

A significant feedback received during the reporting period was regarding the insufficient/inappropriate packaging used for

our 340gm cans of Floron product. For this, we had taken a target of developing new packaging material/caps for Floron

cans. Customers pointed out there was extensive leakage of the product, in spite of undertaking packaging with precision.

We immediately identified the causes and solutions for this problem.

Cause & Solution Result

Cause

Unable to adjust crimping head movement as required.

Solution

• Explored various options and vendors for procuring caps

• Undertook design changes

“Differentiating different

sizes of Floron boxes is so

easy. I love working for SRF

as it takes care of the basic

yet critical requirements of

contract workers as well!”

- Contract worker who lifts Floron boxes for loading to vehicles

Responsible MarketingBeing the market leader in refrigerant products in the country entrusts

us with certain implicit responsibilities. As the single largest supplier of a

variety of products, we interact with various customers, dealers and end-

users to identify safety hazards and health concerns. It was observed that

the market was flooded with spurious refrigerant products, resulting in

serious safety hazards and undesirable consequences.

We realigned our marketing strategy to incorporate customer awareness

as an integral element of our advertising campaigns. As a result of this,

we published a series of public interest statements in leading chemical

newsletters illustrating the consequences of using spurious products,

resultant long-term damage to equipment, recent real-life case studies

and mitigation measures to be taken before purchase. We engaged

with customs officials at leading air and sea ports, communicated

the test results of various products and provided them with access

to SRF’s testing facilities for identifying spurious refrigerants. Written

communication, tips to identify spurious products or adulteration were

also shared subsequently. Through these initiatives, we have witnessed

significant reduction in the circulation of spurious products in the

market. We will strive to continue making our marketing practices more

responsible and oriented towards customer benefit.

Responsible Packaging and LabelingWe are responsible in our practices for displaying product information and

labeling. Product information is displayed as per regulatory requirement

in the Material Safety Data Sheets. We use an Emergency Response

Guide 2004 for product codes and labels as regional requirements for all

our national and international markets. Safety

and awareness of transporters and users

during transportation is ensured by providing

them with Transport Emergency Cards for both

domestic and international consignments.

During the reporting period, we encountered

a case of legal non-compliance with respect

to product labeling. In Jan 2013, a Legal

Metrology Officer, during a surprise visit to one

of our retail counters checked the Floron cans.

He identified that the retail price declaration

on the cans was not in compliance with the

Legal Metrology Act, to which effect a notice

was issued to us. As per Rule 2(l) of the Legal

Metrology Packaged Commodities Rule 2011,

every article should display the Maximum Retail

Price in the prescribed manner ‘MRP – Inclusive

of all taxes’. Our cans had displayed MRP as

‘Rs. 425/-’. This matter was discussed with

the legal department and the entire packaging

material and practice of cans was changed to

incorporate the following changes

• MRP printed on the cans was corrected

to ensure regulatory & legal compliance

• Proactively, the MRP was printed on the

inner cartons of Floron boxes

Before After

1.41

0.2

Crimping Leakage (defects%oftotalfilling)

Cause & Solution Result

Cause

Difference in the shape of gasket and the mouth of the can.

Solution

• Explore various options and vendors for procuring caps

• Undertook significant changes in gasket dimensions Before After

1.5

0.01

Gasket Leakage (defects%oftotalfilling)


• Proactively, an additional label, ‘Packaging

meant for transportation’ was placed on

outer carton of Floron boxes

With the implementation of the above changes,

the notice was responded appropriately with

submission of compounding charges of Rs 1.5

lakh. We will strive to ensure that such non-

compliances do not occur in future.

Development of Local Supplier for a Critical Raw Material

Oleum is one of the major raw materials for our

HF plant. We were completely dependent on

a single supplier for meeting our entire Oleum

requirement, as there was only one manufacturer

of the product in the factory neighborhood.

There was only one other source in the region.

The lead time for procurement was 3 days,

which rendered procurement from this supplier

uneconomical due to higher expenditure on

freight. Despite best efforts of various teams, we

had reached dangerous (near stock out) levels

several times. It was also perceived that the

current supplier, on account of being the sole

supplier, occasionally displayed monopolistic

behaviour, enhancing our risks. The other

challenges in relying on a single vendor included:

• Oleum production is a corrosive process,

requiring the supplier’s plant to undergo

annual maintenance for a period of 1-1.5

months. This prolonged shut down of the

plant impacted our business operations.

In spite of negotiations with the supplier,

we continued to face sourcing issues

during the supplier plant shut down

Raw Material Sourcing Outbound Logistics Distribution Network

Domestic

• Chlorine

• Oleum

• Sulphuric Acid

• TCE

• TCAC

Imported

• Fluorspar

• Chloroform

• TCE

Domestic

• HCFC 22

• HFC 134a

• Chloro methanes

• Specialty fluoro chemicals

• By product sales

Exports

• HCFC 22

• HFC 134a

• Specialty fluoro chemicals

Domestic

• 150 dealers across the country

• 6 ware house locations across the country

Exports

• Made directly from production facilities to customers

Our supplier engagement procedures include:

• Supplier selection, evaluation and re-evaluation through

defined procedures. Dealer evaluation and registration through

defined procedures. Results, findings and key observations are

documented and available for future reference

• Comprehensive supplier contracts, regular audits to ensure

compliance to the Company’s significant policies, specifically

pertaining to human rights, health and safety

• Community partnerships or co-operatives for local procurement of

raw material, wherever possible

• Local procurement to minimise environmental impacts

Sustainable Supply ChainSupply chains form a critical element of business operations and

are managed by the procurement and strategic sourcing divisions.

We maintain supply chain sustainability through various policy

interventions, implementing controls for de-risking and promote local

suppliers wherever possible. The chart below depicts our national and

international ties with upstream and downstream suppliers along with

logistics obligations.

• Alternative modes of transport

with primary focus on reducing the

Company’s carbon footprint

• Seeking feedback regarding the

Company’s policies, nature of work and

supplies, benefits, payment terms and

other queries

We ensure that most of our significant

suppliers, as classified through our internal

policy manual include human rights clauses in

investment/service agreements. In 2011-12,

8 supplier contracts were screened against

human rights parameters, whereas 5 suppliers

underwent this screening in 2012-13.

period. Additionally, extra storage capacity required during the

supplier shut down period was a challenge.

• Owing to the hazardous nature of Oleum production, it was

challenging to convince existing Sulphuric Acid manufacturers to

create a separate facility for manufacturing of Oleum. Further lack

of additional customers for Oleum discouraged Sulphuric Acid

manufacturers from making new investments.

In order to overcome these sourcing challenges which ultimately affected

production or sometimes resulted in losses, we initiated the process

of developing a new, local manufacturer and supplier of Oleum. We

engaged with them to set up a new manufacturing unit with a capacity

of 300 MT/month. They requested for an assurance on the amount of

supply to be procured every month/year. This was a genuine concern as

we were the sole customer for Oleum procurement at that time. In order

to address this concern, we offered an annual confirmed intake of 3,600

MT to the satisfaction of the new supplier. After several discussions,

visits, meetings with the technical team of the new supplier, the

manufacturing unit was finally set up. We placed a trial order which was

fulfilled satisfactorily.Today, we have signed an MoU with them for two

years and they have been supplying us with requisite quantities of Oleum

since 2011.

Our intention to develop the local communities and to contribute

towards improving their economic status near our manufacturing units

is strengthened through this successful initiative. This is in line with our

Risk Management strategy under which we follow a practice to ideate for

innovative solutions and create mutually beneficial business propositions

between local suppliers and SRF.

GRI Content IndexReport Section

Page No.

GRI 3.1 Reporting Guidelines Reference

ReportedUNGC Reference

Remarks

Letter from MD & CEOs 6-9 1.1 Fully Statement from the most senior decision maker of the organisation

About Us 12-131.2, 2.1, 2.2, 2.3, 2.5,

2.7, 2.8, 2.10Fully

GRI Content Index

64 2.4 FullySRF-CB’s corporate office is located at Block - C, Sector - 45, Gurgaon - 122 003, Haryana, India

64 2.6 FullySRF-CB is a strategic business division of SRF Limited, a privately held company

64 2.9 Fully

During the reporting period, the company appointed two independent CEOs to lead the Fluoro Chemicals and Specialty Chemicals businesses separately. Apart from this, there were no significant changes in the structure or ownership of the company.

About the Report 4-53.1, 3.3-3.8, 3.10,

3.11, 3.13Fully

3.10 - Re-statements made in the report have been incorporated at relevant sections as applicable3.13 - The report has been externally assured by independent agency - KPMG

GRI Content Index

64 3.2 FullyOur previous biennial report was for the period from 1st April 2009 to 31st March 2011

64 3.9 Fully

Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators are explained in the relevant sections of the report as applicable.

Strategic pillars for sustainability

23 3.12 Fully

About us – Corporate governance

18-19 4.1, 4.9, 4.10 Fully

Principles 1-10

GRI Content Index

64 4.2 Fully The Chair of the Board of Directors is an Executive Officer

64 4.3 FullyPage 4 of the FY 2011-12 & Page 4 of FY 2012-13 Annual report, accessible at http://www.srf.com/InvAnnualReport.asp

64 4.4 Fully

There is no formal system to provide recommendation/ guidance. However, there are certain critical issues where the Board of Directors can take a decision subject to approval by shareholders. Employees having any questions regarding application of Code of Conduct by fellow employees or organisations by discussion with superior/process owner, business HR head, Head of Works and CEO (in that order)

64 4.5 FullyRemuneration of Directors is governed by the Companies Act. Specific remuneration for Executive Directors is determined by the shareholders at the general meeting within the limits stipulated by the Companies Act

64 4.6 FullyDetails of all transactions with related parties is placed before the Board of Directors in the quarterly meeting

64 4.7 Fully

Board members at SRF-CB are some of the most eminent persons in the chemicals industry. Apart from their qualifications, their selection is determined by mandated Clause 49 of the Listing Agreement. The details are provided in our Annual Report accessible at http://www.srf.com/InvAnnualReport.aspx

64 4.11 FullyOur risk management procedures take care of essential risks to the business from various sustainability issues. The use of precautionary approach is implicit in our risk management procedures

Summary of goals and performance

10 4.8 Fully

Sustainable economic growth - Public Policy

43 4.12, 4.13 Fully

Stakeholder engagement and materiality

20-21 4.14 - 4.17 Fully

About the report – Key Financial Metrics

14 EC1 Fully

Principles 1, 4, 6 and 7

GRI Content Index

64 EC2 PartiallyThe Company identifies risks arising out of climate change, but these are currently not monetized

64 EC3, EC4, EC7 Fully

EC3 - The company provides for retirement benefits to employees in the form of the following schemes

- Superannuation Fund - Provident Fund - Gratuity fund

These benefits are provided in proportion of employees’ salaries as mandated by the regulations of Government of India

EC4 - The company has not received any significant financial assistance from the government during the reporting period.

EC7 - Recruitment currently is based purely on merit. While we do prefer to hire persons from the local community, we do not have a defined policy to that effect

Employee development 44-49 EC5 FullyResponsible product development

56-61 EC6 Fully

Community engagement and development

28-35 EC8, EC9 Fully

Responsible resource management

37-39EN1, EN2, EN8 - 15,

EN21-22, EN26, EN29 Fully Principles 7,

8 and 9Energy and climate change 25-27 EN3 - 7, EN16, EN19-20, Fully

Report SectionPage No.

GRI 3.1 Reporting Guidelines Reference

ReportedUNGC Reference

Remarks

GRI Content Index

65 EN17, EN18 Partially

Principles 7, 8 and 9

EN17 - Due to internal challenges, employee movement and change management issues, data could not be captured comprehensively, which resulted in incomplete data availability for estimating emissions.

EN18 - Due to internal challenges, employee movement and change management issues, the initiatives could not be implemented or monitored properly.

65 EN23, EN27, EN28 Fully

EN23 - There were no significant spills (spills greater than 159 litres in a single occurrence of an incident) as a result of our operations in the reporting period

EN27 - Our products require minimal packaging that does not have significant impact on the environment

EN28 - No instances of non compliance has been reported during the reporting period

Employee Development 44-49 LA1-3, LA12 Fully

Principles 1, 2, 3, 4, 5 and 6

GRI Content Index 65LA15, HR5, LA4, LA5,

LA6, LA9, LA14Fully

LA15 - In the reporting period, there was no case of employee availing parental leave

HR5, LA4 - The Company does not have any trade unions. However, the Company does not restrict freedom of association, and disputes are resolved through the “Works Committee” as per the provisions of The Industrial Dispute Act, 1947

LA5 - The Company follows the provisions of The Industrial Dispute Act, 1947 and provides 21 days of notice regarding operational changes. In the reporting period, there were no operational changes

LA6 - The company has EHS committee constituting 50% representation from the management staff and 50% worker’s representation

LA9 - As the management does not recognize trade unions, health and safety topics are covered in employment contracts

LA14 - As a policy, the ratio of basic salary and remuneration of women to men is 1:1 for each employment category.

Health and safety 50-55 LA7 FullyEmployee Development; Community engagement and development

44-49, 28-35

LA8 Fully

Employee Development; Health and Safety

44-49, 51-55

LA10 Fully

GRI Content Index 65 LA11 Partially

As a practice, we provide support for skills management and lifelong learning support to employees’ pre and post their retirement on various topics like finance management, soft skills, etc. However, these initiatives are currently not documented. We will aim to document and report these initiatives in our subsequent reports

Employee Development and About us – Corporate Governance

44-49, 18-19

LA13 Fully

Responsible product development

56-61 HR1, HR2 Fully

Employee Development 44-49 HR3, HR8-11 Fully

GRI Content Index

65 HR4 Fully There no incidents of discrimination during the reporting period

65 HR6 Fully

Our management systems established in line with SA 8000 enable us to screen our contracts on various human rights aspects – child and forced labor, freedom of association, discrimination, disciplinary practices, working hours and remunerations

65 HR7 Fully Elimination measures are implemented as per the provisions of SA 8000Community engagement and development

28-35 SO1, SO9-10 Fully

Principle 10

GRI Content Index

65 SO2 PartiallyCurrently, our risk management procedures do not cover corruption related risks across our business functions. We are planning to include these risk areas in our robust risk management framework in the future

65 SO3 Partially

Currently SRF-CB do not conduct dedicated employee trainings on the company’s anti-corruption policies and procedures. However, these topics are covered under code of conduct and SA8000:2008 Std trainings

65 SO4 FullyIn the reporting period, no incidents of corruption were reported. The company has robust policies to address such incidents. Details of the mechanisms are provided in About us – Corporate governance

65 SO7 Fully There were no cases of legal actions in the reporting period

65 SO8 FullyNo instance of non-compliance has been reported during the reporting period

Sustainable economic performance – Public policy

43 SO5 Fully

About us – Our business chemistry

12-13 SO6 Fully

GRI Content Index65 PR1,PR2, PR8 Partially

Principles 1 and 8

Currently, we do not undertake life cycle assessments of our products. We rely on third party information on life cycle impacts for major products

65 PR8 Fully During the reporting period, no such incidents were reportedResponsible product development

56-61 PR3-7, PR9 Fully

GoalsandTargets(2013-15)

Energy and climate change

Reduction in absolute electricity consumption by 3%

Sustain in Scope 1 GHG emissions at 2012-13 level

Community development

Reach 6,500 families through NRM, increase their income by INR 10,000 annually by 2015

Plantation in 1,000 hectare land

Waste Land development - 500 hectare

Responsible resource management

Reduction in waste generation by 5%

Reduction in specific water consumption (m3/MT of product) by 1%

Sustainable economic growth

Commissioning and stabilisation of new HFC 134a plant at Dahej

Commissioning and stabilisation of new HF plant at Dahej

Employee development

Sustain employee turnover below 10%

Sustain employee unplanned absence below 1% of available man-hours of work

Provide 40 man hours of training per employee per year


Sustain employee satisfaction levels at more than 75%

Health and safety

10% rolling target for first aid and minor injury reduction

Ensure zero reportable injuries

Provide 12 man-hours training per annum on EHS to each employee

Responsible product development

Development of 3 new products

GlossaryAIIMS – All India Institute of Medical Sciences

AM – Autonomous Maintenance

ANM – Auxiliary Nurse Midwife

Anganwadi – Government sponsored child care and mother care centre in India

ASHA – Accredited Social Health Activist (instituted by the government of India)

ASSOCHAM – Associated Chambers of Commerce and Industry of India

BLT – Business Leadership Team

BSC – British Safety Council

CHC – Community Health Care

CII – Confederation of Indian Industry

CMS – Chloromethanes

CPP – Captive Power Plant

DCS – Distributed Control Systems

DTQMP – Description of Total Quality Management Process

EAM – Enterprise Asset Management

EHS – Environment, Health and Safety

ERP – Enterprise Resource Planning

ESG – Environmental, Social and Governance

ETP – Effluent Treatment Plant

EWR – Engineering Work Request

FC – Fluoro Chemicals

FICCI – Federation of Indian Chambers of Commerce and Industry

FO – Furnace Oil

FMEA – Failure Mode and Effect Analysis

FTA – Fault Tree Analysis

GHG – Green House Gasses

GWP – Global Warming Potential

HF – Hydrofluoric Acid

HFC – Hydrofluorocarbon

HOG – Hot Oil Generation

HSD – High Speed Diesel

ICC – Indian Chemical Council

JUSE – Union of Japanese Scientists & Engineers

KPI – Key Performance Indicators

NRM – Natural Resource Management

OEM – Original Equipment Manufacturer

PDPC – Process Decision Programme Chart

PHC – Primary Health Care

PLC – Programmable Logic Circuit

PRADAN – Professional Assistance for Development Action (An NGO)

PSP – Problem Solving Process

QC – Quality Circle

REACH – Registration, Evaluation, Authorisation and Restriction of Chemicals

RSACS – Rajasthan State AIDS COntrol Society

RTE – Right to Education

SARD – Society for All Round Development (An NGO)

SC – Specialty Chemicals

TFE - Tetrafluoroethylene

TIE – Total Involvement of Employees

TQM – Total Quality Management

Profile Disclosures

Disclosures on Management Approach

Performance Indicators & Sector Supplement Performance Indicators

Stan

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Disc

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Same as requirement for Level B

Management Approach Disclosures for each Indicator Category

Repo

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ally

Assu

red

Report on all criteria listed for Level C plus:1.23.9, 3.134.5 - 4.13, 4.16 - 4.17

Management Approach Disclosures for each Indicator Category

Report fully on a minimum of any 20 Performance Indicators, at least one from each of: economic, environment, human rights, labor, society, product responsibility.***

Respond on each core and Sector Supplement* indicator with due regard to the materiality Principle by either: a) reporting on the indicator or b) explaining the reason for its omission.

Repo

rt Ex

tern

ally

Assu

red

outp

utou

tput

outp

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Report on1.12.1 - 2.103.1 - 3.8, 3.10 - 3.124.1 - 4.4, 4.14 - 4.15

Not Required

Report fully on a minimum of any 10 Performance Indicators, including at least one from each of: social, economic, and environment.**

* Sector supplement in final version** Performance indicators may be selected from any finalized Sector Supplement, but 7 of 10 must be from the original GRI Guidelines*** Performance indicators may be selected from any finalized Sector Supplement, but 14 of 20 must be from the original GRI Guidelines

Report Application Level C C+ B B+ A A+4

SRF LimitedBlock-C, Sector 45

Gurgaon 122003

Haryana, India

Tel: (+91-124) 435 4400

Fax: (+91-124) 435 4500

E-mail: [email protected]

Web: www.srf.com

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